KKM Deposit Unwinding in Turkey: A Foreign Account Guide

Turkey's KKM (kur korumalı mevduat — FX-protected deposit) accounts were once among the world's largest government-backed savings schemes. At their peak they held the equivalent of hundreds of billions of US dollars in lira deposits. If you are a foreign national with a KKM account at a Turkish bank, or if your company in Turkey converted foreign currency reserves into such deposits, the programme is now winding down and you need to understand what that means.

What Was the KKM Scheme?

Turkey launched KKM in late 2021 as part of an unconventional monetary experiment. Under the arrangement, savers and companies could convert their foreign currency or gold holdings into Turkish lira term deposits. The Central Bank of Turkey (TCMB) backstopped the deal: if the lira depreciated more than the deposit's interest rate during the term, the Treasury would compensate the difference. Depositors effectively received a floor on their return regardless of currency movements.

For companies, the legislative foundation was Law 7352, which introduced a temporary provision — Geçici Madde 14 — into Turkey's Corporate Tax Law (5520 sayılı Kurumlar Vergisi Kanunu). This article offered corporate tax exemptions on the exchange rate gains that arose from converting qualifying foreign currency balances into KKM deposits. Individual savers participated through a separate regulatory framework under central bank and banking regulation authority rules.

Who Could Hold a KKM Account in Turkey?

Both Turkish residents and foreign nationals who held accounts at Turkish banks could enter the scheme. Corporate participants included foreign-owned subsidiaries, branches, and joint ventures registered in Turkey that had eligible foreign currency balances on their year-end balance sheets. Individual foreign nationals who maintained personal bank accounts at Turkish banks and held foreign currency or gold savings were also able to convert those savings into KKM deposits.

If you or your Turkish company joined the scheme, you now face decisions about what to do as accounts mature or are wound down. For background on how foreign businesses operate within Turkey's financial system, see our guide on foreign capital partnerships in Turkey.

How the Unwinding Works

Turkey's return to more conventional monetary policy from 2023 — sharply higher interest rates and a stabilising currency — made the Treasury guarantee increasingly costly to maintain. Banks were instructed to stop actively promoting KKM renewals, and no new accounts are being opened under the scheme. Existing accounts have been maturing and, in most cases, converting back into standard TL deposits or foreign currency holdings.

In practice, you receive your principal plus the protected return at maturity. You then choose whether to hold the proceeds in TL, convert to another currency, or move the funds abroad. The Capital Markets Board and Turkey's broader financial regulatory environment have been normalising alongside this shift, which has changed the investment landscape for foreign nationals in Antalya and across Turkey.

Tax Implications: What Happens When You Exit

For corporate depositors, this is where legal advice becomes important. Turkish administrative courts — including the Council of State (Danıştay) — have confirmed the rule embedded in Geçici Madde 14 of the Corporate Tax Law: if a company withdraws from its TL KKM deposit before maturity, the taxes that were exempt under the scheme immediately come due. They are collected together with a tax loss penalty (vergi ziyaı cezası) and late interest (gecikme faizi). Timing your exit incorrectly could eliminate the scheme's tax benefit entirely and result in significant additional charges.

For individual account holders, the scheme worked differently. The protection was a return guarantee rather than a direct tax exemption, so the unwinding does not trigger the same kind of penalty. However, when funds are released, you should check whether the interest earned is subject to withholding tax in Turkey, and whether a double taxation treaty between Turkey and your home country applies to reduce that rate.

If you plan to transfer proceeds abroad after your accounts unwind, see our article on profit repatriation and dividends from Turkey for a summary of the rules that apply.

Practical Steps for Foreign Account Holders

Start by identifying whether your KKM account is a personal savings account or a corporate account — the legal treatment differs materially. Second, locate the maturity date: accounts that run to term avoid the early-withdrawal penalties. Third, if you are considering exiting before maturity, request a tax assessment first. Fourth, once funds are released, decide between TL reinvestment, FX conversion, or transfer abroad — each carries its own tax and regulatory implications in Turkey. Keep records of the original conversion, the returns received, and any bank communications, as these may be needed for tax filings.

Frequently Asked Questions

Q: Can I still open a new KKM account in Turkey?

New KKM accounts are not being offered. You can open standard TL or foreign currency term deposits at Turkish banks, subject to the usual account-opening and anti-money-laundering requirements.

Q: What happens if I withdraw my corporate KKM funds before maturity?

Under the Corporate Tax Law's temporary article, any tax exemption you relied on is reversed. The taxes become due immediately, with a penalty for the tax shortfall and interest for late payment. The Danıştay has confirmed this rule in multiple decisions.

Q: Do I owe Turkish tax on KKM returns as a non-resident individual?

Turkish-source interest income is generally subject to withholding tax for non-residents. The applicable rate can be reduced if a tax treaty exists between Turkey and your home country. A tax adviser should assess your specific situation.

Q: My Turkish company had KKM accounts that are now maturing. Is there anything special to declare?

If the accounts mature at term and all conditions were met, the exemption should remain intact. You will need to reflect the dissolution of the account properly in your corporate tax return. If you have any uncertainty about whether all conditions were satisfied, take legal advice before filing.

How Mona Hukuk Can Help

Our Antalya team advises foreign nationals and international businesses on Turkish corporate finance, tax compliance, and investment structures. We can review your KKM account status, assess any pending tax exposure, and help you plan the next steps — whether that means reinvestment in Turkey, repatriation of funds, or restructuring your financial arrangements.

Contact us at contact@monahukuk.com or call +90 (242) 606 14 32 to schedule a consultation in Antalya.