AMENDMENTS REGARDING THE UPPER LIMIT OF CASH PAYMENTS IN TÜRKİYE
We refer to our Newsletter dated 5 July 2024 informing you regarding the below mentioned upper limit of cash payments.
In Türkiye, the cash payments are allowed only up to a legal ceiling determined by the Communiqué numbered 459 published in the Official Gazette numbered 29572 and dated 24 December 2015. The purpose of such a limitation is providing transparency in financial transactions and preventing illegal activities, such as money laundering and tax evasion.
Amendments have been made in the aforementioned Communiqué in order to expand its scope and also to include non-tax payers to be subjected to the certain obligations. Relevant amendments have been published in the Official Gazette on 18 October 2024 and numbered 32696, in the Communiqué numbered 572 on Amendments to the General Communiqué of the Tax Procedure Law numbered 459 (the “Communiqué”). The aim of the amendments is to increase the effectiveness of tax audits. The requirement of authentication brings new responsibilities for both customers and sellers which have been indicated with examples in the Communiqué.
The relevant amendments are in brief as follows:
• The phrase “and non-taxpayers” has been added after the expression “to taxpayers” in the first paragraph of the ‘2nd Mandate’ part. This indicates that “non-taxpayers” will also be affected by certain obligations. The scope of obligation has been expanded through including non-taxpayers into this definition.
• The phrase “tax-exempt tradesman”, in Turkish, “vergiden muaf esnaf”)” has been added in the section titled “3rd Definitions” of the Communiqué to include “those who are not taxpayers” and subparagraph (d) has been revised as follows:
“d) Those who are not taxpayers: For the purposes of this Communiqué, those who are not required to receive invoices under the first paragraph of Article 232 of the Tax Procedure Law, shall fall under this definition including first and second class merchants, self-employed professionals, merchants whose income is determined by simple methods, farmers who are obligated to keep records, excluding tax-exempt tradesman.”
The persons who are not required to receive an invoice within the scope of Article 232 of the Tax Procedure Law (e.g. first and second class merchants, freelancers, earnings determined by the simple method, farmers who are required to keep books, etc.) will be assessed by virtue of this definition.
The obligation of authentication for the payments will be mandatory for transactions involving non-taxpayers, and for all kinds of collections and payments exceeding TRY 7,000 to be made through intermediary financial institutions (i.e. banks, private financial institutions, PTT “Turkish Post Office”) and has to be authenticated with the documents issued by these institutions.
If the payments within the scope of the authentication requirement are made in person, the amount exceeding TRY 7,000 should be reported to the branches of intermediary financial institutions or banks, and the payment details must be clearly stated.
• The phrase “excluding those who are not taxpayers” has been added to the subparagraph (h) of the section titled “4.2. Collections and Payments Not Covered” of the Communiqué.
“h) Collections and payments related to transactions conducted by those subject to the obligation of documentation (excluding those who are not taxpayers) with foreigners and/or individuals not residing in Türkiye must include the passport numbers of the mentioned individuals on the issued invoices, and it is mandatory for the amounts collected in cash under this subparagraph to be authenticated by the banks or intermediary financial institutions with documents issued by them by the end of the first business day following the collection.”
Kindly note that collection of payments subject to authentication must be deposited into the bank account by the end of the first working day following the payment in transactions with foreign nationals and/or non-resident individuals in Türkiye. In such cases, the passport number of the foreigner must be inscribed on the invoice
Our Law Firm remains at your disposal for any further clarifications you may need.
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