Currently no legal framework exists in Turkey providing for the taxation of cryptocurrency sales or of acquisitions through mining, airdrops, forging, or forking. Current law does not provide a clear legal basis for the taxation of revenues generated from the sale or acquisition of cryptocurrencies. The government has included the creation of a tax framework for cryptocurrency transactions in its medium term 2021-2023 economic plan. Tax law scholarship suggests that taxation of cryptocurrency as commodities may be the most feasible approach under existing laws, while the creation of an ad hoc tax framework has also been discussed.
The Turkish government estimates that approximately 2.4 million people in Turkey owned at least some amount of cryptocurrencies in 2020. The government has so far taken a wait-and-see approach to the regulation and taxation of cryptocurrencies. Nevertheless, recent government policy statements have prominently mentioned regulation and taxation of cryptocurrencies, suggesting a possible regulatory effort in the near future. In its Eleventh Development Plan (2019-2023) the Turkish government has set implementation of a “Blockchain-based digital central bank money” and supporting the “formation of a safe financial technology (fintech) ecosystem which provides equal opportunities for companies . . . considering international good practices” as developmental objectives in the financial sector.
II. Tax Treatment of Cryptocurrency Under Current Law
Currently no framework exists in Turkey for the taxation of value created by the acquisition, sale, exchange, or appreciation of cryptocurrency. The primary reason for this is that no formal definition of cryptocurrency is made in tax legislation, and Turkish legal principles—the constitutional principle of the legality of taxation and the general tax law principle of specificity of taxation—preclude taxation not explicitly provided for in law.
The absence of a legal framework on the taxation of cryptocurrency means that there is no law on the tax treatment of cryptocurrency acquired through mining, airdrops, forging, or forking.
The categorization of cryptocurrencies as ”electronic money” was precluded early on after the passage of the Law No. 6493 on Payment Systems and Electronic Money in 2013. That law’s definition of electronic money parallels that of the EU’s E-Money Directive, so it was uncontroversial when the Banking Regulation and Supervision Agency of Turkey released a press statement in November 2013 clarifying that cryptocurrencies did not fall under the definition of ”electronic money” in Law No. 6493 and thus could not be regulated or overseen under that law.
Nevertheless, the tax law and accounting literature has addressed the question in light of the specific characteristics of Turkish constitutional, tax, and finance laws. Relevant tax literature has identified four options that could be taken under the current tax laws (with minor amendments) for enabling the taxation of income derived from acquisition, exchange, and appreciation of cryptocurrencies, absent an ad hoc tax framework for cryptocurrencies. These four options are taxation as foreign exchange, as commodities, as negotiable instruments, or as intangible rights. The choice of each of these avenues have different tax implications, as they are subject to different tax regimes under the Tax Procedure Code (TPC) and the relevant substantive tax laws, such as the Law on Income Tax (LIT), Law on Corporation Tax (LCT), and the Law on Value-Added Tax (LVAT).
The predominant view in the literature appears to be that taxation of cryptocurrency as commodities is the most feasible method under the current laws. Previous statements from government officials support this view; for instance, the then-director of the Turkish Revenue Administration, Adnan Ertürk, noted that the Capital Markets Board and the Central Bank of Turkey objected to the categorization of cryptocurrencies as negotiable instruments or foreign exchange, and that in his view the most suitable category was as commodities.
Categorization as commodities would require income generated from the sale of cryptocurrencies to be taxed as commercial revenue under the LIT if more than one sale is done in a calendar year. A single sale would be taxed as incidental revenue under the LIT, and benefit from the incidental income exemption up to 40,000 TRY (approx. US$5000). Corporations that engage in the commercial sale of cryptocurrencies would be subject to corporate tax under the LCT. Furthermore, categorization as commodities would render all sales of cryptocurrency taking place within Turkey subject to value-added tax under the LVAT, with the possible exception of sales by brokerage firms provided that they are added in the exemption schedule in the LVAT; brokers would then be subject to the banking and insurance transactions tax under the Law on Expenditure Taxes. It is not clear how acquisition events such as mining would be taxed under a commodities paradigm.
The Turkish government has recently announced its intention to engage in a regulatory effort in the field of taxation of cryptocurrency and virtual assets. The New Economic Programme (Medium Term) 2021-2023, published in September 2020, states as a policy objective that “preparatory work regarding the taxation of transactions realized by use of virtual assets representing digital value and that can be bought and sold digitally [shall be continued].”
For instance, a recently published report on cryptocurrencies by the Technology and Communication Authority intimated that the oversight of cryptocurrencies is likely to be continued primarily by the Capital Markets Board, the financial regulatory authority of Turkey, which suggests they would be categorized as either commodities or negotiable instruments, or alternatively that an ad hoc framework might be proposed.
Prepared by Kayahan Cantekin
Foreign Legal Specialist
 Presidency of the Republic of Turkey, Eleventh Development Plan (2019-2023), §§ 249.5 & 250, adopted by the Grand National Assembly of Turkey, Decision No. 1225, July 18, 2019, https://perma.cc/4AUB-PD2L.
 Mualla Öncel, Nami Çağan, Ahmet Kumrulu, Vergi Hukuku, vol. I, 53 (1985); Coşkun Can Aktan, Anayasal İktisat ve Vergilemede Hukuki Güvenlik İlkesi, 9 Hukuk ve İktisat Araştırmaları Dergisi (Online) 103-4 (2017); see also Fatih Kaplanhan, Kripto Paranın Türk Mevzuatı Açısından Değerlendirilmesi “Bitcoin Örneği”, 353 Vergi Sorunları Dergisi 117 (2018); Gökhan Ünalan, Kripto Paraların Vergilendirilmesi 109 (Master’s thesis, Hacettepe University, 2019), https://perma.cc/JNM7-DJPS.
 Ödeme ve Menkul Kıymet Mutabakat Sistemleri, Ödeme Hizmetleri ve Elektronik Para Kuruluşları Hakkında Kanun, Law No. 6493 (Official Gazette [O.G.] No. 28690, June 27, 2013), https://perma.cc/U66E-AMB2.
 Directive 2009/110/EC, L 267/7 (10.10.2009), https://perma.cc/EKW4-JN7T; Press Release, 2013/32, Banking Regulation and Supervision Agency of Turkey, Nov. 25, 2013, https://perma.cc/W63C-AJ65 (in Turkish).
 See Umurcan Gago & Deniz Ağaç, Bitcoin kazançları vergiye tabi mi?, pwc.com.tr (Nov. 11, 2020), https://perma.cc/77U5-H9H3; Erkan Kızıl, Türkiye’de Kripto Paranın Vergilendirilmesi ve Muhasebeleştirilmesi, 155 Mali Çözüm 179 (2019); Mustafa Çelen, Türk Vergi Mevzuatına Göre Paraların Vergilendirilmesi, 2 Bilimevi İktisat 155 (2018); Ünalan, supra note 3; Kaplanhan, supra note 3.
 Vergi Usul Kanunu [TPC], Law No. 213 (O.G. No. 10703, Jan. 10, 1961), https://perma.cc/LM7E-9LQK; Gelir Vergisi Kanunu [LIT], Law No. 193 (O.G. No. 10700, Dec. 31, 1960), https://perma.cc/Q6XV-JQFC; Kurumlar Vergisi Kanunu [LCT], Law No. 5520 (O.G. No. 26205, June 13, 2016), https://perma.cc/3M4E-M8DZ; Katma Değer Vergisi Kanunu [LVAT], Law No. 3065 (O.G. No. 18563, Oct. 25, 1984), https://perma.cc/8LDX-6JSJ.
 Çelen, supra note 6, at 175; Ünalan, supra note 3, at 127; Hamdi Furkan Günay & Veli Kargı, Kripto Paranın Vergilendirilmesi, 5 JLECON 62 (2018), 73.
 LIT, art. 37/1; Kızıl, supra note 6, at 190-91; Gelir Vergisi Genel Tebliği [Income Tax General Communique] No. 104 (July 8, 1975), https://perma.cc/53QF-QZR4 (in Turkish); Çelen, supra note 6, at 165.
 LCT arts. 1 and 6; Kızıl, supra note 6, at 191; Çelen, supra note 6, at 166.
 LVAT arts. 1/1-2 and 17/4(e),(g); Kızıl, supra note 6, at 191, but cf. Çelen, supra note 6, at 167; Gider Vergileri Kanunu, Law No. 6802 art. 28 (O.G. No. 9362, July 13, 1956), https://perma.cc/RQ5K-DA5B.
 Yeni Ekonomi Programi (Orta Vadeli Program) 2021-2023, § 4, adopted by Presidential Decision Νο. 3030, Official Gazette No. 31259bis, Sept. 29, 2020. (quote translated by Author)
 Information and Communication Technologies Authority (Turkey), supra note 1, at 22.
Last Updated: 03/24/2021