Behind the Shift in Turkey's Encryption Asset System: An Overview of Taxation and Regulatory Framework

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1. Introduction In September 2025, the Turkish government proposed a new bill to authorize its Financial Crimes Investigation Board (MASAK) to directly freeze cryptocurrency accounts in its efforts to combat money laundering and terrorist financing. If successfully passed and enacted, this initiative will represent another substantive tightening in Turkey's anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks, indicating a formal shift from observation to enforcement in its regulation of the crypto asset market. The proposal granting MASAK the power to freeze accounts reflects a shift in regulatory focus—from merely prohibiting payment scenarios to establishing a monitoring and traceable regulatory system. In contrast to the proactive and tightening crypto regulation, Turkey's crypto market is experiencing robust growth: although Turkey explicitly prohibits cryptocurrencies as a means of payment, it has not restricted individual or institutional use in investment and trading; in reality, Turkey's cryptocurrency usage rate is among the highest globally, with user numbers and trading activity far surpassing those of other emerging market countries. Against the backdrop of long-term currency devaluation and inflation, crypto assets have gradually become one of the important asset preservation and investment choices for the Turkish public. In this context, understanding Turkey's crypto asset tax system and the legal logic behind it has become an important prerequisite for investors and businesses evaluating local crypto market risks. Crypto assets are defined as non-monetary intangible assets under Turkish law, with their use and trading jointly regulated by multiple departments, including the Central Bank, the Capital Markets Board (CMB), and MASAK. Although the current system has not established an independent crypto tax law, various taxes—including income tax, corporate tax, value-added tax, and stamp duty—have been partially applied to crypto-related activities from an asset perspective in practice. Therefore, this article will systematically outline the foundational structure and regulatory evolution of Turkey's crypto tax system, covering legal status, regulatory framework, major tax-related interpretations, and administrative logic, while further assessing its potential impact on businesses and individual investors. In the context of tightening regulatory trends globally, studying Turkey's crypto tax system not only helps to understand the country's regulatory path but also provides actionable risk prevention and compliance references for investors active in emerging markets. Immediately add FinTax CEO Assistant to experience the enterprise-level cryptocurrency financial suite FinTax Suite, achieving real-time integration and tracking of crypto assets, easily managing high-frequency trading and market fluctuations, generating various financial reports, and meeting the daily management and auditing needs of institutions!
2. Overview of the Turkish Tax System and Regulation The tax system in Turkey is coordinated by the Ministry of Finance, and the Revenue Administration (Gelir İdaresi Başkanlığı, GİB) is responsible for tax collection, declaration review, and taxpayer services. The Ministry of Finance prepares the annual fiscal budget, tax rates, and expenditure plans, while the Revenue Administration carries out collection and information management functions. The tax year is consistent with the accounting year, which is the calendar year (January 1 to December 31), and a self-declaration system is implemented. Taxpayers must declare their income and tax amounts through the GİB electronic system within the statutory deadline. 2.1 Basic Tax System in Turkey Tax Structure: The overall tax structure in Turkey consists of direct and indirect taxes—direct taxes include corporate income tax and personal income tax; indirect taxes include value-added tax, special consumption tax, stamp tax, and bank and insurance transaction taxes. Tax revenue is uniformly managed by the Ministry of Finance according to the Public Financial Management Law (Law No. 5018) and is distributed to local governments and social security institutions. Basic Tax Rates: According to the GİB 2025 Tax Guide and the official bulletin No. 32590 (July 2, 2024) revisions, Turkey implements a mixed tax system—direct taxes use progressive tax rates, while indirect taxes are at a proportional tax rate. Individuals who have a residence in Turkey or reside for more than 6 months within a tax year are considered tax residents and are taxed on their worldwide income; other individuals or enterprises are non-resident taxpayers and are only taxed on income sourced from Turkey. International Cooperation: In terms of international cooperation, Turkey has signed double taxation avoidance agreements (DTA) with over 80 countries and follows OECD guidelines to prevent double taxation and profit shifting. All taxpayers must register in the GİB system to obtain a tax number. Individuals can register and file annual declarations through the e-Devlet Portal; enterprises must regularly submit value-added tax, withholding tax, and income tax returns through the GİB electronic declaration system. Starting in 2023, the Ministry of Finance has fully implemented electronic invoices, electronic ledgers, and electronic stamp tax systems, requiring all registered enterprises to generate and retain tax certificates through electronic platforms. Digital Taxation: Turkey is also actively promoting digital taxation projects. Since 2023, the Ministry of Finance has fully implemented tax digitalization reforms aimed at achieving complete electronic submission of corporate tax data by 2026. The Ministry of Finance participates in the OECD-led Automatic Exchange of Information (AEOI) system, sharing financial account and cross-border transaction information with international tax authorities to prevent tax evasion and profit shifting. Overall, the Turkish tax system is characterized by a balance between direct and indirect taxes, centralized collection management, and digital declaration. The highly centralized structure of the Ministry of Finance and GİB ensures stable fiscal revenue and provides institutional guarantees for future cross-departmental supervision and financial compliance.

2.2 Turkey's Tax Regulatory System In terms of tax administration, Turkey implements a model that combines quarterly prepayment with subsequent settlement. Corporate income tax payers are required to prepay taxes quarterly and settle them at the end of the year; personal income tax is levied on a progressive scale based on excess income. Tax audits are jointly conducted by GİB and local tax offices, with audit powers covering books and records, bank statements, contracts, and cross-border payment records. If underreporting, insufficient reporting, or non-compliance is found, tax authorities may impose additional taxes along with late fees and administrative penalties. Tax disputes can be reviewed administratively or submitted to tax courts for adjudication. The “Law No. 7524” (Resmî Gazete No. 32550, 2024-07-12) introduced in 2024 further establishes the “domestic minimum corporate tax” and “global minimum tax” system, requiring companies, regardless of any privileges enjoyed, to ensure their effective tax rate is not less than 10% of profits, aligning with the OECD Pillar 2 global minimum tax framework. Furthermore, the tax exemption policy for free zones has been tightened, continuing to apply only to export revenue. Overall, Turkey's tax regulatory system exhibits characteristics of centralized unity, electronic tax administration, and international cooperation. GİB, as the central tax authority, enhances tax compliance through technological platforms and institutional integration; the Ministry of Finance promotes the expansion of the tax base and coordination of multinational tax systems at the policy level, marking the deep integration of Turkey's tax governance into a digital and globalized phase.

3. Turkey's Cryptocurrency Taxation and Regulation 3.1 Cryptocurrency Usage As of now, Turkey's cryptocurrency usage remains highly active. According to Chainalysis's Global Crypto Adoption Index 2025, Turkey ranks 14th in the cryptocurrency adoption leaderboard. This indicates that despite stricter regulations, both the Turkish public and institutions continue to use crypto assets extensively; according to AInvest's market report forecast, by the end of 2025, Turkey's cryptocurrency penetration rate is expected to reach 28.17%, with the total number of users approaching 24.82 million. At the same time, the revenue related to the cryptocurrency market that year is expected to reach $2.2 billion. These figures demonstrate that Turkey's cryptocurrency usage is considerable in terms of both the extent of adoption and the depth of penetration. Turkey's cryptocurrency market is substantial, making it an important market that crypto investors and practitioners cannot ignore, and it provides motivation for the government to strengthen regulation. 3.2 Legal Positioning of Cryptocurrencies Turkey's legal definition of crypto assets has evolved from a regulatory vacuum to formal legislation. At the institutional level, the earliest clear regulation came from the Central Bank of the Republic of Turkey (TCMB) with the regulation published on April 16, 2021—“Regulation on the Prohibition of Using Crypto Assets in Payments.” This regulation was published in the official gazette No. 31456 and officially came into effect on April 30, 2021. The regulation clearly specifies two core points: the prohibition of direct or indirect use of crypto assets in any payment transaction; and the prohibition of payment or settlement services based on crypto assets by electronic money institutions. According to this law, crypto assets are defined by the Turkish authorities as “non-material assets generated virtually based on distributed ledger or similar technologies, distributed through digital networks, but not recognized as legal tender, book money, electronic money, payment instruments, securities, or other capital market instruments.” This definition establishes the non-monetary and non-payment tool attributes of crypto assets within the Turkish legal system, providing a basis for subsequent law enforcement by regulatory agencies. However, this definition only applies to the fields of payment and financial transactions and does not automatically extend to tax legislation. The Turkish Revenue Administration has not yet issued any specific announcements or regulations regarding the taxation of crypto assets, nor has it clarified the tax attributes of crypto assets in the current Income Tax Law or Value Added Tax Law. Therefore, the TCMB's definition of crypto assets as “non-monetary” does not directly constrain the applicability of tax laws; GİB may still categorize them as “intangible assets” or “capital gains income” for taxation based on their economic substance in interpretive announcements or tax administration guidelines. In other words, within the current legal framework, crypto assets are neither legal tender nor have they been considered independent tax objects; their treatment under tax law will depend on future interpretive announcements from GİB and the Ministry of Finance. If Turkey advances the taxation normalization of crypto assets in its tax reform by emulating the EU framework, it is expected to adopt an “economic substance first” interpretative approach, that is, while retaining the central bank's definition, GİB will distinguish them as capital gains or business income for taxation based on the nature of the income. 3.3 Cryptocurrency Regulatory System On July 2, 2024, the Turkish Parliament passed the amendment to the Capital Markets Law (Law No. 6362) - Law No. 7518, which was published in the official gazette No. 32590. The amendment introduced Article 35/B and other provisions, establishing a comprehensive regulatory framework for “Crypto Asset Service Providers (CASPs)”: all CASPs must obtain permission from the Capital Markets Board; they must meet minimum capital requirements, establish internal control and information security systems; the separation of custody and customer assets must comply with independent custody principles; and foreign unlicensed trading platforms are prohibited from providing services to Turkish residents, otherwise they must cease operations within a specified period. According to the OECD 2024 “Crypto Asset Reporting Framework (CARF)” international report, Turkey has indicated its participation in the CARF and CRS cross-border tax information exchange mechanism to achieve international data integration for cryptocurrency accounts. This indicates that Turkey's regulatory path is transitioning from domestic compliance control to international data cooperation, and the future implementation of cryptocurrency taxation will be supported by cross-border information transparency. On the day the amendment took effect, the Capital Markets Board issued a press release further clarifying that crypto asset service providers must complete their license applications and compliance filings by March 31, 2025. In addition, the subsequent implementation rules published in the official gazette No. 32509 on March 13, 2025, further specified details regarding information disclosure, risk warnings, data retention, and cross-border fund transfers. This means that from April 2025, unlicensed trading platforms will no longer be allowed to provide services to Turkish residents. Thus, Turkey's cryptocurrency regulatory structure has initially taken shape: the Central Bank (TCMB) is responsible for defining payment boundaries, the Capital Markets Board (CMB) is responsible for licensing trading and service entities, and the Financial Crimes Investigation Board (MASAK) is responsible for anti-money laundering and account monitoring. The evolution of the legal system since 2021 shows that Turkey has completed a policy shift from prohibiting payments to licensing operations. The current institutional framework is centered on CMB's licensing regulation and MASAK's compliance regulation, supplemented by the Central Bank's payment restrictions and legal definitions, forming a comprehensive regulatory system covering the entire chain of trading, services, compliance, and reporting. This model provides a legal foundation for the future extension of tax collection management and lays an institutional foundation for Turkey's role in the global governance system of crypto assets.

4. Types of Taxes and Tax Rate Mechanism Involved in Cryptocurrency Assets in Turkey Although Turkey has not yet established a specific tax law for cryptocurrency assets, existing general tax types such as corporate income tax, personal income tax, value-added tax, and stamp duty have extensibility in legal logic and applicable conditions. In other words, these existing tax systems may be potential channels for the government to levy taxes on cryptocurrencies during the transition period in the future. Specifically: Corporate tax and personal income tax can correspond to investment income and trading difference income from cryptocurrency assets; value-added tax may apply to scenarios such as platform service fees, custody fees, and matching services; stamp duty may have potential associations with legal documents related to cryptocurrencies, such as signed contracts, custody agreements, and guarantee documents. The following table is organized based on original documents from the Turkish Revenue Administration (GİB) and the Official Gazette (Resmî Gazete), showing the basic applicable scope, tax rates, and official sources of each tax type. 4.1 Corporate Income Tax (Kurumlar Vergisi) If a company engages in cryptocurrency trading matching, custody, payment infrastructure, or market-making business, its operating income may be considered taxable profit for the company and calculated according to the corporate tax rate. In the future, if Turkey formally includes virtual asset trading platforms into the CMB licensing system, this tax item will become the core basis for cryptocurrency companies to comply with tax obligations. 4.2 Personal Income Tax (Gelir Vergisi) If individual investors obtain price difference income through trading cryptocurrencies, in the absence of specific provisions, it may fall under the category of personal income tax as capital gains. 4.3 Value-Added Tax (Katma Değer Vergisi, KDV) For institutions providing matching, custody, consulting, or platform operation services, the service fees, handling fees, etc., charged may be recognized as taxable services and should be declared at a tax rate of 20%. If detailed rules are introduced, KDV will be an important tax type affecting transaction costs. 4.4 Stamp Duty (Damga Vergisi) In scenarios involving OTC trading, custody cooperation, or agency investment agreements, as long as the documents have legal effect and specify amounts, they theoretically need to be taxed according to stamp duty law.

5. Summary

Reviewing the previous text, Turkey's cryptocurrency ecosystem has a distinct duality: on one hand, the market is highly active with strong demand from both retail and institutional investors; on the other hand, the regulatory environment is becoming increasingly strict, with the government continually promoting compliance and transparency at the institutional level.

From Turkey's gradual delegation of authority to MASAK, it is clear that Turkey has transitioned from a ban on payments to preliminary regulation within the international cryptocurrency regulatory framework. The tightening of regulations does not mean the market is closing off; rather, it lays the institutional foundation for a transparent, secure, and long-term cryptocurrency investment environment.

What investors need to do is not to evade regulation, but to win compliance space with records, credentials, and clear funding logic. This will be the most robust way to survive in Turkey's cryptocurrency market in the coming years.