Turkey eyes taxing crypto gains in fiscal tightening drive: report

Turkish Treasury and Finance Minister Mehmet Şimşek is reportedly considering a new tax on gains from stock and crypto investments as part of efforts to fight inflation.

Gains from crypto and stock trading may soon be taxed in Turkey as the country struggles with high inflation. The proposal, which aims to properly tax all fiscal income, was discussed at the ruling party’s recent meeting, sources told Bloomberg.

Details of the plan are still being debated, and new regulations are expected to be considered after parliament reviews crypto-related legislation this week.

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

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

Şimşek emphasized that the regulations that will come in early 2024 aim to reduce the risks associated with crypto trading by protecting individual investors. Key aspects of these regulations will allegedly include legal definitions of key crypto-related terms such as “crypto assets,” “crypto wallets,” and “crypto asset service providers.”

Turkey has been on the FATF “grey list” list since 2021, eroding confidence in its already fragile economy. Amid high inflation rates, cryptocurrencies have gained significant traction in Turkey and have become an alternative financial haven for many.