Mutual funds transactions were not subject to stoppage previously, why is there a stoppage now?
Effective as of October 2006, the taxation of the gains secured through mutual fund transactions has been changed within the scope of the temporary article no: 67 of the Income Tax Law. This is not a new taxation and calculation system, but rather a change in the collection method of the calculated tax.
With the new taxation system:
- The scope of the withholding of tax at source (stoppage) applied since 2006 on the investment instruments over the investors' gains will also include mutual funds as of October 1, 2006 (Income Tax Law, temporary article no: 67).
With this implementation:
- The gains that the investor secures by selling the fund participation certificate will be subject to a 10% stoppage tax. Therefore, the stoppage cut applied on a daily basis over the value appreciation of the mutual fund portfolio has been isolated from the mutual fund.
The following implementations;
- Until July 22, 2006: 15% stoppage tax over the value appreciation of the fund portfolio
From July 23, 2006 until September 30, 2006, 10% stoppage tax over the value appreciation of the fund portfolio
- will be changed as:
As of October 1, 2006, 10% stoppage tax over the gains secured by the investor.
Advantages of The New Tax System:
- Fund Performance Measurement: Stoppage will be applied over the investor's gains, not over the portfolio earnings. The change in the method of tax collection will have a positive impact on the fund earnings and will make the measurement of performance easier.
- Not paying the tax within the fund: Shifting the stoppage tax outside the fund as of October 2006 will have a significant impact in terms of the fund's earnings.
- Convenience in Reporting and Calculation: The method of reporting and calculation of the stoppage tax in commercial transactions has become more clearer compared to the implementation in effect before October 1, 2006.
- Exemption: No stoppage tax will be due on gains secured through the sale of mutual fund participation certificates if at least 51% of the mutual fund portfolio consists of stocks on a continuous basis and the participation certificate is kept for more than 1 year before tit is sold.
- Payment of the tax at the time of the sale: No tax will be due as long as the participation certificate held by the fund investor is not sold.
You may place your buy orders between the hours of 09:00 and 18:00 on the announced demand collection days, and until 12:00 on the last day.
While orders for only 1 or 2 sessions can be placed in the buy/sell step, you can place orders for a minimum of 3 sessions in the morning session, and a minimum of 2 sessions in the afternoon session, with a maximum of up to 40 sessions.