The Communique Related to the Decree on the Protection of the Value of the Turkish Currency Numbered 32, Prepared by the Ministry of Treasury and Finance 09 October 2018
By the Decree amending the Decree on the Protection of the Value of the Turkish Currency numbered 32 published on September 13th, 2018 (“the Decree”), it has been decided that prices of real estate and movable purchase and sell contracts , all kinds of movable and real estate rental contracts including vehicle renting and financial leasing, employment, leasing, service and construction contracts executed between residents in Turkey shall not be drawn in foreign currency or foreign currency indexed. It has been also indicated in the Decree that details regarding the implementation of the Decree will be issued by the Ministry of Treasury and Finance.
The expected Communiqué prepared by the Ministry of Treasury and Finance was published on the Official Gazette dated October 6th, 2018 numbered 30557. The main aspects that are pivotal and have arisen out of the issuance of the Communiqué on the Amendment to the Decree on the Protection of the Value of the Turkish Currency numbered 32 (“The Communique”) are as follows;
1)Which contracts have been excluded from the Decree?
In the Decree entered into force on September 13th, 2018, it has been regulated that the implementation will be valid except for the situations to be specified by the Ministry. These exceptions have been specified in the Communiqué dated October 6th, 2018 issued by the Ministry of Treasury and Finance and parties will be able to determine the price of the contract and other payment liabilities in foreign currency or foreign currency indexed in the situations stated below;
· Service contracts executed by the parties who are not of Turkish nationality
· Service contracts executed in the scope of exportation, transit trade, selling and deliveries deemed as an exportation and foreign currency saver services and activities.
· Service contracts drawn up in the scope of Turkish residents’ activities to be carried out abroad.
· Service contracts executed between the parties who are resident in Turkey on electronic communication which begins in Turkey and ends abroad and vice versa.
· Movable purchase and rental contracts executed between the parties who are resident in Turkey except for vehicle purchase and rental contracts including heavy equipment.
· Selling contracts, executed between the parties who are resident in Turkey, related to software generated abroad as a part of informatics technology and service and license contracts related to software and hardware.
· Leasing agreements related to ships.
· Leasing contracts executed within the scope of loans granted abroad and domestic.
· Employment contracts of which parties are not of Turkish nationality but residing in Turkey.
· Contracts, excluding real estate selling and rental contracts, which state institutions and organizations and the companies of the Turkish Armed Forces Foundation are a party to.
· Other specific contracts which state institutions and organizations are a party to and certain specific transactions of the Ministry of Treasury and Finance
· Liabilities related to constitution, exportation, purchasing, selling of capital market instruments and to the transactions performed
· Employment and service contracts which branch, agency, office, liaison bureau of the persons who are not resident in Turkey and the companies owned directly or indirectly by the persons who are not resident in Turkey by 50% or more and the companies in the free trade zones provided that it is only related to their activities in the free trade zones are a party to
· Contracts (excluding real estate selling and rental and employment contracts) executed with Commercial airline companies of which registered office is in Turkey; companies which serve technical maintenance to the means of aerial transportation, companies which serve floor maintenance service and companies and undertakings that were established by the said companies.
2)Can the negotiable instruments, drawn in the scope of the contracts which have not been specified as an exception in the scope of the Communiqué and of which prices shall not be determined in foreign currency or foreign currency indexed, be drawn in foreign currency?
It is clearly stated in the Communiqué that prices of negotiable instruments to be drawn within the scope of contracts, of which prices shall not be determined in foreign currency or foreign currency indexed pursuant to the Decree dated September 13th, 2018 numbered 85, shall not be determined in foreign currency or foreign currency indexed.
3)Can the contracts which precious metal and/or commodity is indexed to be executed?
In the Communiqué, it is stated that “the contracts which are indexed to the precious metals and/or goods of which prices are determined in foreign currency in the international markets and/or the contracts which are indirectly indexed to foreign currency shall be deemed as contracts indexed to foreign currency.”
Therefore, contracts of which prices shall not be determined in foreign currency or foreign currency indexed, shall not be determined in gold indexed as well.
4)What happens to the contracts signed before the date of September 13th, 2018?
The contracts which were signed before the date of September 13th, 2018 and were specified as an exemption in the Communique dated October 6th, 2018 will continue to be executed in foreign currency or foreign currency indexed.
If the price of these contracts was converted into the Turkish Lira by conciliation of parties after the date of September 13th, 2018, these conversions shall be deemed as valid but parties are able to re-determine the contract price in foreign currency or foreign currency indexed.
Prices of contracts, which were signed before the date of September 13th, 2018, were not specified as an exception in the Communiqué dated October 6th, 2018 and of which prices can’t be determined in foreign currency or foreign currency indexed as per to the related Decree and the Communiqué, shall be re-determined in Turkish Lira by parties.
Vehicle rental contracts (including heavy equipment) signed before the date of September 13th, 2018 can continue to be executed in foreign currency or foreign currency indexed, but prices of vehicle rental contracts signed after September 13th, 2018 shall be re-determined in Turkish Lira.
5)Which criterions shall be taken as a basis in re-determining process?
If parties fail to agree on a contract price in Turkish Lira, the contract price shall be deemed to be determined in Turkish Lira corresponding to the contract price determined in foreign currency over Central Bank effective selling rate dated January 2nd, 2018 and over this price, increasing in monthly rates of change of consumer price index for each month from January 2nd, 2018 until the re-determination date. The important issue is that monthly rates of change of consumer price index for each moth will be implemented separately and the final price will be determined accordingly.
6)What is the process of re-determining in rental contracts of residences and roofed workplaces?
Prices of rental contracts of residences and roofed workplaces signed before September 13th, 2018 will be determined in Turkish Lira by means of procedure stated in the fifth provision abovementioned and the new price shall be valid for two years. If parties do not reach an agreement on the new price, new contract price shall be determined for new rental year, at the end of the rental year in which re-determination was done by increasing over consumer price index in the manner of that whole year will be effected. For rental year after related one year period, if parties do not reach an agreement for rental in Turkish Lira, the new price, which is calculated by the way of increasing the rent amount of the previous rental year on the basis of monthly rates of change of consumer price index, shall be valid until the end of period of two years indicated above.
7)Can defaulted liabilities of contracts, of which prices shall not be determined in foreign currency or foreign currency indexed, be determined in Turkish Lira?
In the scope of the contracts of which prices shall not be determined in foreign currency or foreign currency indexed, due debts (deferred and/or defaulted) before October 6th, 2018 which is the publication and effect date of the Communiqué shall be paid in foreign currency or foreign currency indexed.
As clearly indicated in the Communiqué, within the scope of the contracts of which prices shall not be determined in foreign currency or foreign currency indexed, related provisions shall not be applied for deferred and/or defaulted debts before October 6th, 2018.
8)What is the due date for contracts of which price was determined in foreign currency but to be required to be re-determined in Turkish Lira in accordance with the Decree?
For price re-determination of contract price, new time period as additional or diversified to the Decree has not been regulated by the Communiqué dated October 6th, 2018. Hence, due time for re-determination of contracts of which prices were determined in foreign currency or foreign currency indexed, however of which prices are required to be converted in Turkish Lira is October 13th, 2018 since period of 30 days has been granted to parties by the Decree dated September13th, 2018
The expected Communiqué prepared by the Ministry of Treasury and Finance was published on the Official Gazette dated October 6th, 2018 numbered 30557. The main aspects that are pivotal and have arisen out of the issuance of the Communiqué on the Amendment to the Decree on the Protection of the Value of the Turkish Currency numbered 32 (“The Communique”) are as follows;
1)Which contracts have been excluded from the Decree?
In the Decree entered into force on September 13th, 2018, it has been regulated that the implementation will be valid except for the situations to be specified by the Ministry. These exceptions have been specified in the Communiqué dated October 6th, 2018 issued by the Ministry of Treasury and Finance and parties will be able to determine the price of the contract and other payment liabilities in foreign currency or foreign currency indexed in the situations stated below;
· Service contracts executed by the parties who are not of Turkish nationality
· Service contracts executed in the scope of exportation, transit trade, selling and deliveries deemed as an exportation and foreign currency saver services and activities.
· Service contracts drawn up in the scope of Turkish residents’ activities to be carried out abroad.
· Service contracts executed between the parties who are resident in Turkey on electronic communication which begins in Turkey and ends abroad and vice versa.
· Movable purchase and rental contracts executed between the parties who are resident in Turkey except for vehicle purchase and rental contracts including heavy equipment.
· Selling contracts, executed between the parties who are resident in Turkey, related to software generated abroad as a part of informatics technology and service and license contracts related to software and hardware.
· Leasing agreements related to ships.
· Leasing contracts executed within the scope of loans granted abroad and domestic.
· Employment contracts of which parties are not of Turkish nationality but residing in Turkey.
· Contracts, excluding real estate selling and rental contracts, which state institutions and organizations and the companies of the Turkish Armed Forces Foundation are a party to.
· Other specific contracts which state institutions and organizations are a party to and certain specific transactions of the Ministry of Treasury and Finance
· Liabilities related to constitution, exportation, purchasing, selling of capital market instruments and to the transactions performed
· Employment and service contracts which branch, agency, office, liaison bureau of the persons who are not resident in Turkey and the companies owned directly or indirectly by the persons who are not resident in Turkey by 50% or more and the companies in the free trade zones provided that it is only related to their activities in the free trade zones are a party to
· Contracts (excluding real estate selling and rental and employment contracts) executed with Commercial airline companies of which registered office is in Turkey; companies which serve technical maintenance to the means of aerial transportation, companies which serve floor maintenance service and companies and undertakings that were established by the said companies.
2)Can the negotiable instruments, drawn in the scope of the contracts which have not been specified as an exception in the scope of the Communiqué and of which prices shall not be determined in foreign currency or foreign currency indexed, be drawn in foreign currency?
It is clearly stated in the Communiqué that prices of negotiable instruments to be drawn within the scope of contracts, of which prices shall not be determined in foreign currency or foreign currency indexed pursuant to the Decree dated September 13th, 2018 numbered 85, shall not be determined in foreign currency or foreign currency indexed.
3)Can the contracts which precious metal and/or commodity is indexed to be executed?
In the Communiqué, it is stated that “the contracts which are indexed to the precious metals and/or goods of which prices are determined in foreign currency in the international markets and/or the contracts which are indirectly indexed to foreign currency shall be deemed as contracts indexed to foreign currency.”
Therefore, contracts of which prices shall not be determined in foreign currency or foreign currency indexed, shall not be determined in gold indexed as well.
4)What happens to the contracts signed before the date of September 13th, 2018?
The contracts which were signed before the date of September 13th, 2018 and were specified as an exemption in the Communique dated October 6th, 2018 will continue to be executed in foreign currency or foreign currency indexed.
If the price of these contracts was converted into the Turkish Lira by conciliation of parties after the date of September 13th, 2018, these conversions shall be deemed as valid but parties are able to re-determine the contract price in foreign currency or foreign currency indexed.
Prices of contracts, which were signed before the date of September 13th, 2018, were not specified as an exception in the Communiqué dated October 6th, 2018 and of which prices can’t be determined in foreign currency or foreign currency indexed as per to the related Decree and the Communiqué, shall be re-determined in Turkish Lira by parties.
Vehicle rental contracts (including heavy equipment) signed before the date of September 13th, 2018 can continue to be executed in foreign currency or foreign currency indexed, but prices of vehicle rental contracts signed after September 13th, 2018 shall be re-determined in Turkish Lira.
5)Which criterions shall be taken as a basis in re-determining process?
If parties fail to agree on a contract price in Turkish Lira, the contract price shall be deemed to be determined in Turkish Lira corresponding to the contract price determined in foreign currency over Central Bank effective selling rate dated January 2nd, 2018 and over this price, increasing in monthly rates of change of consumer price index for each month from January 2nd, 2018 until the re-determination date. The important issue is that monthly rates of change of consumer price index for each moth will be implemented separately and the final price will be determined accordingly.
6)What is the process of re-determining in rental contracts of residences and roofed workplaces?
Prices of rental contracts of residences and roofed workplaces signed before September 13th, 2018 will be determined in Turkish Lira by means of procedure stated in the fifth provision abovementioned and the new price shall be valid for two years. If parties do not reach an agreement on the new price, new contract price shall be determined for new rental year, at the end of the rental year in which re-determination was done by increasing over consumer price index in the manner of that whole year will be effected. For rental year after related one year period, if parties do not reach an agreement for rental in Turkish Lira, the new price, which is calculated by the way of increasing the rent amount of the previous rental year on the basis of monthly rates of change of consumer price index, shall be valid until the end of period of two years indicated above.
7)Can defaulted liabilities of contracts, of which prices shall not be determined in foreign currency or foreign currency indexed, be determined in Turkish Lira?
In the scope of the contracts of which prices shall not be determined in foreign currency or foreign currency indexed, due debts (deferred and/or defaulted) before October 6th, 2018 which is the publication and effect date of the Communiqué shall be paid in foreign currency or foreign currency indexed.
As clearly indicated in the Communiqué, within the scope of the contracts of which prices shall not be determined in foreign currency or foreign currency indexed, related provisions shall not be applied for deferred and/or defaulted debts before October 6th, 2018.
8)What is the due date for contracts of which price was determined in foreign currency but to be required to be re-determined in Turkish Lira in accordance with the Decree?
For price re-determination of contract price, new time period as additional or diversified to the Decree has not been regulated by the Communiqué dated October 6th, 2018. Hence, due time for re-determination of contracts of which prices were determined in foreign currency or foreign currency indexed, however of which prices are required to be converted in Turkish Lira is October 13th, 2018 since period of 30 days has been granted to parties by the Decree dated September13th, 2018
Other News
-
15.3.2024
New Regulations Introduced With The 8th Judicial Package
The Law No. 7499 on the Amendment of the Code of Criminal Procedure and Certain Laws ("Law"), which contains amendments and new regulations known as the "8th Judicial Package", was published in the Official Gazette dated 12 March 2024 and numbered 32487. In this article, we will discuss the amendments to the Criminal Procedure Code No. 5271 (" CPC"), Turkish Criminal Code No. 5237 ("TCC"), Turkish Civil Code No. 4721 ("TCC"), Enforcement and Bankruptcy Code No. 2004 ("EBC") and Law No. 6384 on the Duties and Working Procedures and Principles of the Compensation Commission.
-
12.3.2024
Changes In The PDPL Was Published In THE Official Gazette
Law No. 7499 on Amendments to the Code of Criminal Procedure and Some Laws ("Law No. 7499") including critical amendments to the Law No. 6698 on the Personal Data Protection Law ("PDPL") was published in the Official Gazette on March 12, 2024.
-
9.2.2024
Amendments Were Made To The Regulations Based On The Occupational Health And Safety Law
In the Official Gazette dated 4 February 2024 and numbered 32450, amendments were made to some regulations issued based on the Occupational Health and Safety Law No. 6331:
-
1.2.2024
Turkish Competition Board Mergers And Acquisitions Outlook Report For 2023 Has Been Published
On January 5th, 2024, the Turkish Competition Authority has published the Report prepared by the Competition Board on Mergers, Acquisitions And Privatisation Transactions in 2023 ("Report").
-
31.1.2024
Important Principle Decision From The Advertising Board Regarding Discount Sale Advertisements
At the first meeting of the year held on January 9, 2024, the Advertising Board made an important principle decision regarding discount sale advertisements by amending the "Guideline on Advertisements Containing Price Information and Discount Sale Advertisements and Commercial Practices" in order to prevent consumer victimization through misleading advertisements and practices that lead to unfair competition in the retail trade sector.
-
17.1.2024
The Authority to Decide on Trademark Cancellation Passed to the Turkish Patent And Trademark Office!
In Article 192/1 (a) of the Industrial Property Law ("IPL") published in the Official Gazette dated 10 January 2017 and numbered 29944, the enforcement of Article 26 of the Law titled "Cancellation Cases and Cancellation Request" was postponed until seven years later, and with the Provisional Article 4 of the IPL, it was stipulated that the authority to decide on the cancellation of trademarks would be directly exercised by the Intellectual and Industrial Rights Civil Courts until 10 January 2024.
-
16.1.2024
Egemenoğlu Hukuk Bürosu / Internship Application
We are pleased to announce the opening of internship applications at Egemenoğlu Hukuk Bürosu. Legal Internship Application Deadline: March 15 Summer Internship Application Deadline: March 29 Prospective candidates are requested to submit their CVs either through our website www.egemenoglu.av.tr or by sending them to info@egemenoglu.av.tr.
-
12.1.2024
Turkish Sustainability Reporting Standards (TSRS) And Scope Of Application Of TSRSs Were Puslished In The Official Gazette
In the Official Gazette dated 29.12.2023 and numbered 32414, the Public Oversight, Accounting and Auditing Standards Authority (POA) announced the Turkish Sustainability Reporting Standards and determined the principles to be followed in sustainability reports.
-
11.1.2024
Important Regulations Which Are Effective As Of 2024 And/ Or Has Been Made Subject To Time Extension
Laws No. 5746 and No. 6550 extended the regulation on higher depreciation (showing expenses related to depreciation) and calculation rates and periods for new machines acquired for use in R&D, innovation and design activities.
-
19.12.2023
The Principles and Rules to be Applied in Retail Trade have been reorganize
With the "Regulation Amending the Regulation on Principles and Rules to be Applied in Retail Trade" prepared by the Ministry of Commerce and published in the official gazette on 14.12.2023, significant changes were made in the principles and rules of retail trade.
-
18.11.2023
Warning From The Authority On Sending Verification Codes To Customers Via Sms During Shopping
The Personal Data Protection Authority ("Authority") published a Public Announcement ("Announcement") on the Processing of Personal Data by Sending a Verification Code via SMS to the Data Subjects during Shopping in Stores.
-
14.11.2023
Communiqué Amending the Communiqué on the Procedures and Principles Regarding the Application of Article 376 of the Turkish Commercial Code No. 6102 has been published
In order to regulate the procedures and principles to be followed in cases of loss of capital or insolvency of joint stock companies, limited liability companies and limited partnership companies with capital divided into shares within the scope of Article 376 of the Turkish Commercial Code No. 6102 (Law), the Communiqué on the Procedures and Principles Regarding the Application of Article 376 of the Turkish Commercial Code No. 6102 (Communiqué) was first published in the Official Gazette dated 15/09/2018 and numbered 30536, and with the Provisional Article 1 of this Communiqué until 01/01/2023, Within the scope of Article 376 of the Law, it was stated that foreign exchange losses arising from foreign currency denominated liabilities that have not yet been fulfilled may not be taken into account in the calculations regarding capital loss or insolvency.
-
3.11.2023
Law No. 7464 on the Leasing of Houses For Tourism Purposes And Amendment To Certain Laws Has Been Published
Published in the Official Gazette dated 2.11.2023 and numbered 32357 and published in the Official Gazette dated 2.11.2023 and numbered 32357, the Law on the Leasing of Houses for Tourism Purposes and Amendments to Certain Laws (No: 7464) aims to determine the procedures and principles regarding the leasing of houses to real and legal persons for tourism purposes.
-
28.10.2023
Partial Payment Period In Pension: Regulation On Partial Payment In The Private Pension System Has Been Published
With the amendment made to the Private Pension Savings and Investment System Law on 19.01.2022, a regulation was introduced stipulating that the participant can be partially paid up to fifty percent of the accumulation amount in his account, excluding the amounts in the State contribution account, without leaving the system, in cases and conditions determined by the Insurance and Private Pension Regulation and Supervision Agency. In this case, payments can also be made from the amount in the State contribution account, not exceeding twenty-five percent of the partial payment amount and the principles and procedures regarding the transactions to be carried out within this scope, including the practices regarding the State contribution, will be determined by the Institution with the appropriate opinion of the Ministry and with the amendment dated 19.01.2022, the relevant regulation is included in the Individual Pension Savings and Investment System Law.
-
9.9.2023
Focus On Digital And Green Transformation: Türkiye's Medium - Term Program Published.
The Medium-Term Program (2024-2026), prepared by the Ministry of Treasury and Finance and the Presidency of Strategy and Budget, was approved and published in Official Gazette No. 32301 dated September 6th, 2023.