Turkey’s Tax Exemption Shift to Hit 84 Equity-Heavy Funds

Turkey’s plan to scrap a withholding tax exemption on certain mutual funds will impact 84 funds managing about 71 billion liras ($2.1 billion), according to an impact analysis reviewed by Bloomberg.

The proposal would put an end to an exemption on gains from fund units held by investors for more than a year in domestic equity-dominant portfolios. The exemption has allowed some investors to engage in “tax planning” beyond the original intent of promoting long-term stock investments, according to the proposal. The bill was submitted to parliament by the ruling AK Party on Friday.