The Turkish parliament has removed provisions for cryptocurrency taxation from a major omnibus bill following significant political opposition and stakeholder pressure. The proposed regulations, which would have introduced a 0.3% transaction tax on all crypto transfers and a 10% withholding tax on capital gains, were withdrawn just before formal debate began.
The withdrawn provisions would have imposed a 0.3% tax on all cryptocurrency sales and transfers processed by service providers in Turkey, with the tax collected and paid to the state monthly. Additionally, the legislation would have required intermediaries to withhold 10% of their clients' capital gains on a quarterly basis.
The decision to remove these crypto tax articles came during discussions of a wide-ranging bill covering tax policy, economic regulations, and defense spending. Deputy Speaker of the Grand National Assembly, Celal Adan, presided over the session where the last-minute agreement for deletion was reached. The provisions had been added to the bill by the ruling Justice and Development (AK) Party but faced strong criticism from opposition lawmakers and industry stakeholders.
Experts highlighted significant flaws in the proposed approach, particularly the intention to tax transfers to self-custody wallets. Ussal Sahbaz, managing partner at Ussal Consultancy & MnP Istanbul Hub, explained that "this is equivalent to taxing cash withdrawals from a bank" and noted that such an approach is "extremely rare—reportedly seen only in Kenya."
Sahbaz also warned that the withholding tax on crypto income would likely push users toward offshore platforms with declaration-based taxation, citing similar capital outflows observed in India and South Korea. He emphasized that "poorly designed taxation does not increase revenues—it shifts the tax base elsewhere."
The legislative process faced criticism for moving too quickly through parliamentary committees with minimal consultation with interested parties. The crypto provisions were only withdrawn at the last moment due to active efforts by a small group of lawmakers and pressure from stakeholders.
While the crypto tax plan has been shelved for now, representatives of the ruling party indicated they may file a revised draft as part of a separate legislative initiative. The Turkish government continues to seek ways to tap into the financial flows generated by the country's growing cryptocurrency sector, which has expanded significantly amid high inflation of the national fiat currency.
