THE UPPER LIMIT OF CASH PAYMENTS

In Türkiye, the cash payments are allowed only up to a legal ceiling determined by the Communiqué No: 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.

In this respect:

• The allowed maximum amount for cash payments/collections is TRY 7,000 (approximately EUR 200).   Any payment /collection of money exceeding this amount has 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 total amount of the transactions made with the same person or institution on the same day exceeds the allowed amount of TRY 7,000, even if each transaction remains below the specified ceiling of cash payment, beginning from the transaction that exceeds TRY 7,000, in total, payments/collections have to be made through intermediary financial institutions.
• On the other hand, while determining the obligation of authentication for the payments made in installments, the total amount, not the amount of the installments, should be taken into consideration and if the total amount exceeds the allowed limit, the payment/ collection of each installment should be made through financial institutions even if they remain below the applicable cash ceiling limit of TRY 7,000.

Considering the applicable ceiling, to ease the money payment /collection processes, potential electronic payment methods such as Apple Pay, Google Pay, Paylib etc. can be taken into practice (after evaluating their availability and currency in Türkiye).

Exception to this rule is the payment to be made by foreign clients or a real person who does not reside in Türkiye despite being a Turkish citizen; payments made by foreigners or real persons who do not reside in Türkiye can be collected in cash even if the transaction exceeds the limit of TRY 7,000, provided that the following conditions are fulfilled;

• The passport number of the relevant client who is a foreigner or a real person who does not reside in Türkiye shall be indicated on the invoice to be issued within this scope,
• The amounts collected in cash shall be certified with the documents issued by the intermediary financial institutions by the end of the first business day following the receipt, which means that the sales assistant collecting the cash payment shall deposit the money to a financial institution on the first business day following the collection of the money.

Non-compliance with the ceiling of cash payment is subject to the monetary fine as quoted below, for each breach. Monetary fine amounts are re-evaluated by the government every year. Other possible legal responsibilities arising from non-compliance are also reserved.

In this respect;

According to Tax Procedure Law Duplicate Article 355 as a general rule a special irregularity penalty;

1. For “first-class merchants” and “self-employed professionals” in the amount of TRY 11,800 (approximately EUR 335),
2. For “second-class merchants”, farmers keeping books, and those with income determined by simplified procedure in the amount of TRY 5,800 (approximately EUR 165),
3. For others not listed in the above, in the amount of TRY 3,000 (approximately EUR 85),

is imposed.

However, there is also a specific clause for the taxpayers who fail to comply with the obligation to authenticate their collections and payments with documents issued by banks, similar financial institutions, or postal administrations. Such taxpayers failing to fulfill their obligation to authenticate will be subject to a special irregularity penalty of 5% of the transaction amount for each transaction infringing the obligation. The monetary fine to be applied for each transaction shall not be less than the amounts specified above.  The total amount of special irregularity fines to be imposed within a calendar year cannot exceed 8,700,000 TL (approximately EUR 248,000) in accordance with this clause.

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