The Turkish parliament has approved a law that would make lira deposits converted from foreign currencies under the lira support scheme exempt from corporate income tax on profits generated from the conversion.
State news agency Anadolu reported that interest and profits earned on converted lira accounts with a maturity of at least three months will be exempt from tax if they are converted before the filing date of the fourth quarter tax return, i.e. February 17.
On January 11, the Turkish Official Gazette announced that Ankara has included corporate deposit accounts in foreign currency and gold converted into lira in a scheme that protects local currency savings from exchange rate volatility.
The scheme, announced by President Tayyip Erdogan in December, will compensate depositors for any loss in the value of the lira incurred over the life of the deposit.
The lira fell 44% against the dollar last year after the central bank cut its benchmark interest rate by 500 basis points to 14% since September. This month, the lira has stabilized. On Friday, it fell 0.8% to 13.43 against the dollar.
Deposits under the scheme have so far reached 163 billion liras ($12.1 billion), Erdogan said. But Reuters said most of that amount comes from existing lira accounts, not dollars or euros.
Also, in accordance with the legislation, accounting for inflation will be deferred until December 31, 2023, even if all the necessary conditions for accounting for inflation in the financial periods 2021, 2022 and quarterly periods of 2023 are met.