Two Separate Taxes on Cryptocurrency in Turkey! How Will it Affect the Crypto Investors?
As cryptocurrency becomes popular around the globe, it has also sought its roots in Turkey. However, Turkey like the UK and the USA has also implemented two separate taxes on crypto transactions. Our team of crypto accountants has researched and gathered factual information on these two separate taxes that will apply to crypto transactions in Turkey. Let’s see whether these tax rates will disappoint the investors or not.
Understanding the Two Taxes on Crypto Transactions in Turkey
Crypto Transactions are subject to two separate taxes in Turkey, which are;
Income Tax: This tax is applied to any capital gains earned from selling cryptocurrencies. The capital gains tax rate in Turkey is progressive, as it increases as your income increases. The current rate set for this tax ranges between 15% to 35%.
Value Added Tax (VAT): This tax applies when cryptocurrencies are converted into Turkish Lira (TRY) or any other fiat currency. The current VAT rate in Turkey is 18%.
Potential Impact on Investors
Given the high rate of both taxes, it can potentially dampen the enthusiasm of investors for cryptocurrencies in Turkey. Especially considering the high rate of capital gains tax can erode away the successful profits made through cryptocurrency investments. Additionally, the VAT adds another layer of cost to cryptocurrency transactions, which becomes another reason for discouragement for some investors participating in the market.
Do these Rates Disappoint Investors?
Whether the investors are disappointed with these rates or not, depends on the following factors;
Total Profitability of Cryptocurrency Investments: If the investors are making hefty profits, then for them paying the taxes will not be burdensome like others.
Comparison to other Investment Options: If the tax rates are similar to other investments like stocks, and bonds, the investors will still tolerate these tax rates on their cryptocurrency transactions.
Future Regulations: The stance of the Turkish government on cryptocurrencies can change the future, which can potentially impact the tax rates.
Final Say
This implementation of separate taxes in Turkey on cryptocurrency transactions adds a layer of complexity for the investors as they discourage them from further investments. However, the overall impact on the cryptocurrency market in Turkey will likely depend on several factors. Before investing in cryptocurrency to earn profits, investors should carefully consider the tax implications in Turkey.