The Turkish parliament, after last-minute negotiations between ruling and opposition lawmakers, withdrew the cryptocurrency tax provisions from the comprehensive legislative package.
The deleted provision imposed a 0.03% transaction tax on cryptocurrency transactions through regulated service providers and a 10% withholding on capital gains quarterly.
Vice Chairman Celal Adan presided over the session that agreed to remove cryptocurrency tax measures ahead of the official discussion on the comprehensive bill. This bill also includes defense spending and broader economic regulations.
Shift from aggressive approach to complete withdrawal
The original proposal submitted on March 2 included a 10% withholding tax collected quarterly on cryptocurrency profits generated on platforms regulated by the Capital Markets Board of Turkey (CMB), regardless of whether users actually sold their positions.
This bill also proposed a 0.03% transaction tax on all cryptocurrency sales and transfers through service providers.
The parliamentary Planning and Budget Committee approved the amendment on March 4-5, which removed the 10% capital gains tax and exempted cryptocurrency transactions from value-added tax. As a result, only the 0.03% transaction tax remained in the committee's approved version.
However, even this reduced provision was completely deleted from the final comprehensive bill after opposition and industry stakeholders expressed concerns about capital outflow to foreign platforms.
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Concerns over capital outflow, possibility of reintroduction as a separate bill
Turkish analyst Ussal Sahbaz pointed out that the withholding method for cryptocurrency profits is likely to lead users to foreign platforms where taxation is based on self-reporting. According to industry observers, similar tax structures in India and South Korea have also caused unintended capital outflows.
Government officials stated that cryptocurrency tax measures could resurface as separate legislation. There are about 24.8 million cryptocurrency users in Turkey, but the 'ban on the use of cryptocurrency assets as a means of payment' enacted in April 2021 remains in place, and the central bank shows no signs of lifting it.
The comprehensive bill retains other fiscal measures, including a 20% special consumption tax on diamonds and jewelry.
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