What is BSMV (Banking and Insurance Transactions Tax)?
BSMV is Türkiye’s transaction tax on banks, insurers and other financial institutions under the Expenditure Taxes Law No. 6802: it is charged on the money they collect in their favour: interest, fees, commissions and premiums: instead of VAT, because financial transactions are outside the KDV system. The cost is routinely passed on to customers, so every loan, card fee or policy in Türkiye quietly carries BSMV.
Rates and base
The general rate is 5% on interest, commissions and service fees; 1% applies to interbank deposit interest and certain money-market transactions; foreign-exchange sales carry a separate, periodically adjusted rate set by Presidential decision. The tax base is the gross amount received in the institution’s favour: no input-credit mechanism exists, which is why BSMV, unlike VAT, cascades.
Why fintechs care
Scope follows the nature of the institution and transaction: banks and insurers are always in; licensed lenders (factoring, leasing, financing companies) are in for their core transactions; payment and e-money institutions’ fee income has been treated as BSMV-liable in practice. A fintech pricing model that ignores 5% BSMV on fee income misstates unit economics, and a BaaS partnership must allocate who bears it contractually.
Taxable event and taxpayer
Under Article 28 of the Expenditure Taxes Law (Law No. 6802), all money that banks and insurance companies receive in their favour, in cash or on account, from any of their transactions is subject to BSMV. The same article also brings bankers into scope: persons and institutions whose principal business is banking transactions and services are treated as bankers for those transactions. Factoring, financial leasing and financing companies fall within scope on this basis for their core transactions. The taxpayer is the bank, banker or insurance company receiving the money (Article 30).
Rate-setting power and filing
The base is the amount of money remaining in the institution’s favour (Article 31). The law authorises the President to differentiate the rate by transaction type within certain limits (Article 33). The tax period is the calendar month, and the return is filed by the evening of the fifteenth day of the following month (Article 47).
The VAT exemption in more detail
Article 17/4-e of the VAT Law (Law No. 3065) exempts transactions within the scope of Law No. 6802 from VAT. The exemption is partial: the financial institution cannot deduct the VAT it incurs for those transactions. Whether a fintech’s revenue line is subject to BSMV or VAT therefore determines both its pricing and the recoverability of VAT on supplier invoices; for payment and e-money institutions, this distinction should be made product by product.
Is BSMV charged on top of KDV?
No: a transaction is subject to either KDV or BSMV, never both. Financial transactions within Law 6802 are KDV-exempt.
Do startups outside finance ever meet BSMV?
Yes: on every bank loan they take (the bank passes the 5% on interest through) and in venture debt term sheets, where all-in cost should be modelled BSMV-inclusive.
Related: KDV (VAT).
Sources. Expenditure Taxes Law No. 6802. Statute links open the official consolidated Turkish texts on mevzuat.gov.tr.