On 1 January 2013, the Official Gazette No. 28515 published Decree No. 2012/4116 of the Council of Ministers, which modifies the withholding tax rates applicable on:

• Interest income derived from deposit accounts (except interest paid between resident banks)
• Profit shares received from interest-free loans
• Profit shares received from profit and loss partnership certificates

Accordingly, different withholding tax rates will apply, depending on the maturity date of deposit accounts and profit shares as follows:

Previously, a single 15% withholding tax was applicable to all these types of interest.

The decree is effective as from 2 January 2013.In cases where the interest is derived from foreign currency accounts and profit shares, the above-mentioned withholding tax rates are set as 18%, 15% and 13%, respectively.

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