Taxation of Individuals

 

In the individual retirement scheme, premiums to be paid to the pension mutual funds can be deducted from the rate of income tax, providing that they will not exceed 10% for the self-employed and annual total of the minimum wages rate for employees. Council of Ministers is authorised to increase the limit of 10% to 20% and the annual total of minimum wages rate to its 2 fold.

 

Premium margins paid by employers to the individual retirement scheme for their employees can be entered as an expense directly, providing that they will not exceed the said limit of 10%.

 

25% of the payments made to those people who are entitled to retirement under the individual pension scheme and to those who leave the system necessarily due to death, disability or disqualification shall be exempted from the income tax and any withholding.

 

Pension salaries or retirement grants which are paid after the entitlement to retirement and of which 25% are exempted from tax of any kind shall be deemed as the revenue of securities and they will be subject to withholdings tax instead of any return.

 

Accordingly, pension funds, relief funds and pension and insurance companies, which have legal entity, shall be subject to a withholding in rate of:

 

a) 15% for the payments made to those who have left the individual retirement scheme without paying premium, subscription or contribution fees for ten years.

 

b) 10% for the payments made to those who have paid the subscriptions for ten years, but left the individual retirement scheme before being entitled to the right of retirement and to those who paid premium or subscription to other schemes or insurance companies for ten years, but left this individual retirement scheme necessarily due to the reasons such as death, disability or disqualification.

 

c) 5% for the payments made to those who have been entitled to retirement from the individual retirement scheme and those who left the necessarily due to the reasons such as death, disability or disqualification.

 

 

Taxation of Fund

 

In accordance with the relevant articles of the Corporate Tax Law, all revenues earned by the retirement mutual funds as a result of portfolio management are exempted from corporate tax.

 

All papers issued by insurance and retirement companies and retirement mutual funds shall be exempted from stamp duty.