11September2018

RECENT DEVELOPMENTS TO PROTECT THE VALUE OF TURKISH CURRENCY

RECENT DEVELOPMENTS TO PROTECT THE VALUE OF TURKISH CURRENCY

In the Communique No. 2018 – 32 / 48 on the Decree No. 32 on the Protection of the Value of Turkish Currency, which entered into force through its publication in the Official Gazette No. 30525 dated 04.09.2018, the procedures and principles have been determined to be applied for bringing into Turkey the export proceeds that will arise from the export transactions performed by Turkish residents.

In accordance with the Communique No. 2018 – 32 / 48, it has become obligatory to bring the export proceeds into Turkey and sell at least 80% of them to the banks. The provisions of the Communique No. 2018 – 32 / 48, which entered into force through its publication on the Official Gazette on 04.09.2018, will be valid for six months.

The duration for bringing the relevant export proceeds into the country shall not exceed 180 days as of the actual export transaction date. Export transactions to be performed against cash payment in foreign currency must be realized within 24 months and the usage period of the proceeds, which are obtained as cash payment in foreign currency in relation to an export transaction and sales and deliveries regarded as export transactions within the scope of Inward Processing Authorization Certificate and Exemption Certificate for Taxes, Duties and Charges, as well as services and activities that generate foreign currency proceeds, shall be equal to the validity date of such certificate.

Legal provisions regarding special export transactions:

As stipulated in the Communique No. 2018 – 32 / 48, in certain cases the time period for bringing the proceeds into Turkey is different than the generally accepted rule of 180 days as of the actual export transaction date. In such special cases, the time limits for bringing the export proceeds into Turkey and selling 80% of them to banks shall be as elaborated below:

  • 365 days for export proceeds regarding exports to abroad by contracting firms;
  • immediately after the final sales for the exports on consignment basis; and 180 days following the end of fair, exhibition or week for goods sent for sale against a price to international fairs, exhibitions and weeks;
  • in case of failure to bring back into the country the goods which are temporarily exported to abroad, within the period granted or within the additional period, or if such goods are sold within such periods, 90 days following the completion of the period or following the date of final sale;
  • 90 days following the due dates which are determined in the sales on credit or leasing agreement, in respect of exportation performed on credit or by way of leasing as per the legislation on Export Regime and Financial Leasing.

It is stipulated that intermediary banks will close the relevant export accounts for export proceeds brought into Turkey by the stipulated deadline relating to the export of commercial goods. Any export account that is not closed by the stipulated deadline shall be notified to the Tax Department or Tax Office by the intermediary banks. An additional time will be granted accordingly to close such accounts, which will be limited to 90 days except for force majeure events and justified circumstances, and the relevant accounts will be closed accordingly. In case of force majeure, additional time periods of six months each shall be granted.

  • Subject to not exceeding US$ 100,000 or its equivalent, export accounts with a shortage of up to 10% of the amount specified in the declaration or the form, regardless of the existence of any force majeure event, (including shortage arising from insurance costs) shall directly be cancelled and closed by banks without any regard to the payment method,
  • Subject to not exceeding US$ 200,000 or its equivalent, open accounts with a shortage of up to 10% of the amount specified in the declaration or the form, with due consideration of the events of force majeure, shall be cancelled and closed by the relevant Tax Department or Tax Office.
  • In respect of each and every customs declaration, the requests for cancellation of the open accounts with shortage exceeding US$ 200,000 or its equivalent shall be examined and finalized by the Ministry of Treasury and Finance, with due consideration of any force majeure event and justified circumstances.

The provisions stipulated in the Communique shall be in force for duration of 6 months after the date of their publication.

Click here to access the Communique in Turkish.

http://www.resmigazete.gov.tr/eskiler/2018/09/20180904-2.htm

Written by Selma Kıy, Posted in Taxation Law

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About the Author

Selma Kıy

CPA, Managing Partner
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