What is BSMV? How is BSMV calculated?

Date: 24 December 2025

Financial transactions are an indispensable part of daily life and business activities. Various taxes and deductions are encountered when using many financial services such as bank loans, credit cards, insurance transactions, and the like. One of these taxes is the Bank and Insurance Transactions Tax, or BSMV for short. Although many people actually pay BSMV, they are not sufficiently informed about what this tax is, which transactions it applies to, and how it is calculated.

What is BSMV?

BSMV (Bank and Insurance Transactions Tax) is an indirect tax levied on certain transactions carried out by banks and insurance companies. In Turkey, this tax is regulated under Law No. 6802 on Expenditure Taxes.

BSMV is collected on interest, commissions, premiums, and similar income earned by banks and insurance companies for the services they provide. Although the legal taxpayer is the bank or insurance company, in practice this tax is passed on to the customers. Therefore, individuals and businesses unknowingly pay BSMV on many transactions.

Purpose and Scope of BSMV

The primary purpose of BSMV is to generate revenue for the public through transactions in the finance and insurance sectors. Since the banking and insurance sectors have high transaction volumes, taxes collected from this area constitute a significant portion of the state budget.

Furthermore, banking and insurance transactions are generally not subject to Value Added Tax (VAT). Therefore, BSMV is implemented as a special type of tax that ensures the taxation of transactions in this area.

Which Transactions are Subject to Banking and Insurance Transactions Tax (BSMV)?

BSMV does not apply to all transactions made by banks and insurance companies. The tax is only levied on transactions that generate income and are specified in the law.

The main transactions subject to BSMV are:

Interest income from loans granted by banks
Interest and late payment interest applied to credit card transactions
Commissions and fees charged by banks for services provided
Insurance premiums collected by insurance companies
Interest amounts related to financial leasing transactions
Certain financial services of factoring and financing companies

BSMV is calculated and collected on the income obtained from these transactions.

Transactions Exempt from Banking and Insurance Transactions Tax (BSMV)

Certain banking and insurance transactions are exempt from BSMV under the law. These exemptions are implemented to encourage economic activity and reduce the financial burden in certain areas.

The main transactions exempt from BSMV are:

Interest paid on deposit accounts
Profit shares of participation banks
Certain loans granted within the scope of export and investment incentives
Certain types of loans obtained from abroad
Mandatory insurances included in the social security system

These exemptions may vary depending on the type of transaction and legislation.

What are the BSMV Rates?

BSMV rates may vary depending on the type of transaction. However, the most commonly used rate in practice is 5%.

Generally:

Bank loan interest
Credit card interest and late payment interest
Insurance premiums
Banking service commissions

The BSMV rate is applied at 5%. In some special transactions, this rate may be lower or even zero. Therefore, the applicable rate should always be checked according to the type of transaction.

How is BSMV Calculated?

The method of calculating BSMV is quite clear. The tax is calculated using a rate determined based on the taxable income amount. The most important point to note here is that BSMV is calculated not on the principal amount, but on income elements such as interest, premiums, or commissions.

The calculation logic is as follows:

First, the income obtained from the transaction subject to BSMV is determined.
The relevant BSMV rate is applied to this amount.
The resulting amount represents the BSMV to be paid.

BSMV is generally collected by the bank or insurance company and declared to the relevant tax office.

Who Pays the Banking and Insurance Transactions Tax (BSMV)?

Legally, the taxpayer of BSMV is the bank or insurance company that carries out the transaction. However, in practice, this tax is passed on to the customer receiving the service. Therefore, the party that actually pays the BSMV is the individual or business that uses the loan, takes out insurance, or benefits from banking services.

This is a natural consequence of BSMV being an indirect tax.

The Place of Banking and Insurance Transactions Tax (BSMV) in Accounting Records

For businesses, BSMV is generally accounted for as a financing expense. Along with interest paid on bank loans, BSMV is included in expense accounts.

Accurate accounting entries are of great importance for:

Financial statements reflecting reality
Avoiding problems during tax audits
Ensuring accurate cost analysis for the business.

Why is BSMV (Banking and Insurance Transactions Tax) Important for Businesses?

BSMV is a significant cost factor, especially for businesses that use credit, have high insurance expenses, or conduct intensive banking transactions. Ignoring BSMV can lead to underestimating financing costs.

Therefore, businesses need to:

Know the BSMV rates on the financial products they use
Include BSMV in their total cost calculations
Accurately track BSMV in their accounting and finance departments.

Common Mistakes Regarding Banking and Insurance Transactions Tax (BSMV)

Some of the most common mistakes regarding BSMV are:

The misconception that BSMV is calculated on the loan principal
The belief that all bank transactions are subject to BSMV
Not noticing the BSMV on insurance premiums
Not considering BSMV as a business expense

These mistakes can lead to faulty planning in both individual budgets and business finances.

Conclusion

BSMV (Bank and Insurance Transactions Tax) is a significant type of tax levied on certain transactions of banks and insurance companies, and in practice, directly passed on to customers. It appears in many financial transactions, from loan interest to insurance premiums, and is generally applied at a rate of 5%.

Knowing the scope of BSMV, which transactions it applies to, and how it is calculated correctly ensures the proper management of costs for both individuals and businesses. Considering BSMV, especially when making financial decisions, helps prevent unexpected expenses.