Turkey eyes taxing crypto gains in fiscal tightening drive: report

Turkey’s Treasury and Finance Minister Mehmet Şimşek is reportedly considering a new tax on gains from investments in stocks and crypto as part of efforts to support disinflation.

Gains from activity associated with trading crypto and stocks may soon be taxed in Turkey as the country struggles with high inflation. The proposal, aimed at ensuring proper taxation of all financial income, was discussed during a recent ruling-party meeting, sources told Bloomberg.

The details of the plan remain under discussion, with new regulations expected to be addressed after parliament reviews legislation on crypto this week.

Turkey has been considering putting regulations on crypto so that the country could be removed from the Financial Action Task Force’s (FATF) “grey list.” In mid-2022, the AK Party of President Recep Tayyip Erdogan proposed a minimum capital requirement of 100 million lira (approximately $3 million) for crypto businesses. However, no final decision has been made yet on the matter.

In early November 2023, Şimşek said the country was finally introducing crypto legislation. Speaking to the nation’s planning and budget commission, he noted that the country has met 39 of the 40 FATF standards and was in the “final stage” of compliance.

In early 2024, Şimşek emphasized that the upcoming regulations aim to mitigate the risks associated with crypto trading, protecting retail investors. Key aspects of these regulations allegedly would include legal definitions of crucial crypto-related terms such as “crypto assets,” “crypto wallets,” and “crypto asset service providers.”

Turkey has been on FATF’s “grey list” list since 2021, a status that has eroded confidence in its already fragile economy. Amid high inflation rates, cryptocurrencies have gained significant traction in Turkey, becoming an alternative financial refuge for many.