NEW UPPER LIMIT OF CASH PAYMENTS AND TRANSACTIONS WITH FOREIGNERS

As explained in our Newsletter dated 5 July 2024, the Communiqué No. 459 initially set the upper limit for cash payments at TRY 7,000.

However, with the publication of the Communiqué Serial No. 575 Regarding the Amendment of the General Communiqué Serial No.459 of the Tax Procedure Law, (in Turkish, “Vergi Usul Kanunu Genel Tebliği (Sira No: 459)’nde Değişiklik Yapılmasina Dair Tebliğ (Sıra No: 575)”) published in the Official Gazette numbered 32738 and dated 30 November 2024 and entered into force on the same day, the aforesaid limit has been increased from TRY 7,000 to TRY 30,000. 

Additionally, modifications have been introduced concerning transactions with foreigners and/or individuals who are not residents in Türkiye.

Within this scope, the following two key amendments are noteworthy:

1.   Increase of the Verification Threshold to TRY 30,000:

–    Under the Law No. 7524, amendments were made to Article 257 of the Tax Procedure Law, extending the obligation for verifying payments and collections to include individuals who are not registered as taxpayers.

–    Following the publication of Tax Procedure Law General Communiqué No. 572 on 18 October 2024, non-taxpayers were required to make payments and collections exceeding TRY 7,000 through financial institutions (i.e., banks, private financial institutions, PTT “Turkish Post Office”).

–    As per the latest Communiqué, this threshold has now been increased from TRY 7,000 to TRY 30,000 (approximately EUR 830), meaning that any payments or collections above this amount must be processed through an intermediary financial institution and authenticated with the documentation provided by these institutions.

–    Furthermore, examples in the Tax Procedure Law Communiqué Serial No.459 concerning transactions conducted on the same day with the same individuals or institutions, as well as partial payments and collections, have been revised accordingly.

–    The examples in the section titled “Partial Collections and Payments” of the Communiqué Serial No.459 have been amended as follows:

• Within the scope of the documentation obligation, (X) made separate purchases of goods from (Y) on the same day, amounting to TRY 10,000, TRY 10,000, TRY 8,000 and TRY 3,000 respectively. Since the total value of purchases made by (X) from (Y) on the same day exceeds the threshold of TRY 30,000 with the inclusion of the TRY 3,000 purchase, the collection and payment related to this last transaction (only) must be carried out through intermediary financial institutions as required by the documentation obligation.
  If the documentation obligation is not adhered to in these collections and payments, separate penalties will be imposed on both (X) and (Y).
• A taxpayer (X) will receive TRY 160,000 in exchange for providing its services to (Y) for a period of one year. According to their agreement, (Y) will pay the service fee in installments of TRY 15,000. In this case, issuing a professional service receipt for TRY 15,000 on the dates the installments are paid will not eliminate the documentation obligation. Since the total contract amount exceeds the specified threshold, each partial collection and payment must be documented through intermediary financial institutions.    If the documentation obligation is not complied with in these collections and payments, separate penalties will be imposed on both the self-employed professional (T) and (K) A.Ş.If the documentation obligation is not complied with in these collections and payments, separate penalties will be imposed on both the self-employed professional (T) and (K) A.Ş.

–    To streamline the payment and collection process, electronic payment methods such as Apple Pay, Google Pay, Paylib, etc., may be considered (subject to their availability and usage within Türkiye).

2.    Transactions with Foreigners and/or Non-Residents of Türkiye:

–    Previously, it was required that transactions with foreigners include the copy of the passport, and that the collected amounts be verified through documents issued by intermediary financial institutions by the end of the first business day following the collection.

–    The latest Communiqué introduces an exception for payments made by foreign clients or individuals who do not reside in Türkiye, even if they are Turkish citizens:

These payments can be collected in cash, even if they exceed the limit of TRY 30,000, provided that the passport number is written on the relevant invoice. There will be no obligation to obtain the copy of the passport and there will be no obligation to deposit the collected amounts into intermediary financial institutions by the end of the first business day following the collection.

Our Law Firm remains at your disposal for any further clarifications you may need.

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