AMENDMENT REGARDING THE POSSIBILITY TO DETERMINE THE PRICE AND OTHER CONTRACTUAL PAYMENT OBLIGATIONS IN FOREIGN CURRENCY OR INDEXED TO FOREIGN CURRENCY FOR SALE OF MOVABLES
With the Communiqué numbered 2018-32/51 amending the Communiqué (Communiqué No: 2008-32/34) Regarding the Decree No: 32 on the Protection of the Value of the Turkish Currency (in Turkish, “Türk Parası Kıymetini Koruma Hakkında 32 Sayılı Karara İlişkin Tebliğ (Tebliğ No: 2008-32/34)’de Değişiklik Yapılmasına Dair Tebliğ (Tebliğ No: 2018-32/51)”) which has been published in the Official Gazette dated 6 October 2018 and entered into force on the same date, the Government has provided the rules and procedures governing the prohibition to enter into contracts where the price and other contractual payment obligations are agreed in foreign currency or indexed to foreign currency, under certain conditions (“Prohibition”).
Furthermore, the Communiqué numbered 2018-32/52 amending the Communiqué (Communiqué number: 2008-32/34) on Decree No. 32 on the Protection of the Value of the Turkish Currency (in Turkish, “Türk Parasının Kıymetini Koruma Hakkında 32 Sayılı Karara İlişkin Tebliğ (Tebliğ No:2008-32/34)’de Değişiklik Yapılmasına Dair Tebliğ (Tebliğ No: 2018-32/52) ”) which has been published in the Official Gazette on 16 November 2018 and entered into force on the same day, has granted some new exceptions for the Prohibition.
One of these exceptions was for the contracts for sale of movables between the real or legal persons residing or established in Turkey, except for sale of vehicles, in accordance with the Article 8/9 of the Communiqué.
The said Article 8/9 of the Communiqué has been amended with the Communiqué numbered 2022-32/66 amending the Communiqué (Communiqué No: 2008-32/34) Regarding the Decree No: 32 on the Protection of the Value of the Turkish Currency (in Turkish, “Türk Parası Kıymetini Koruma Hakkında 32 Sayılı Karara İlişkin Tebliğ (Tebliğ No: 2008-32/34)’de Değişiklik Yapılmasına Dair Tebliğ- Tebliğ No: 2022-32/66)”), published in the Official Gazette dated 19 April 2022 and numbered 31814 and entered into force on the same day.
Hence, in accordance with the new amendment, even though it is possible to determine the price and other contractual payment obligations in foreign currency or indexed to foreign currency, for the sale of movables between the real or legal persons residing or established in Turkey, except for sale of vehicles; it is mandatory to fulfill and accept the contractual payment obligations in Turkish currency.
The details regarding the implementation of the new amendment have been clarified with the press release of the Ministry of Treasury and Finance dated 21 April 2022.
In this context, the following shall be taken into consideration for the sale of movables between the real or legal persons residing or established in Turkey (except for sale of vehicles):
- All kinds of goods and property that do not fall under the definition of immovable property shall be considered in the scope of movable properties, and therefore their sale is subject to the abovementioned provision.
- The condition of fulfilling and accepting payment obligations in Turkish currency shall not be required regarding the bills of exchange (e.g. cheques) in foreign currency issued before 19 April 2022 for the fulfillment of the movable sales contracts concluded before 19 April 2022.
- The condition of fulfilling and accepting payment obligations in Turkish currency shall not be required regarding the invoices issued before 19 April 2022.
- The condition of fulfilling and accepting payment obligations in Turkish currency shall not be required for the payment obligations within the scope of precious metals and precious stones’ purchase and sale transactions in foreign currency and the clearing of these transactions at the Precious Metals and Precious Stones Market of Borsa İstanbul A.Ş. (in Turkish, “Borsa İstanbul A.Ş. Kıymetli Madenler ve Kıymetli Taşlar Piyasası”).
- Since the condition of fulfilling and accepting payment obligations in Turkish currency is required for the sale of movables between the real or legal persons residing or established in Turkey, the sale of movables between persons residing in Turkey and persons residing abroad is not subject to the abovementioned obligation.
- The instruments of payment such as cheques etc., issued in foreign currency on 19 April 2022 and after this date, shall not be used to fulfill payment obligations resulting from the sale of movables realized or to be realized between the real or legal persons residing or established in Turkey.
- Since the amendment does not include a provision that changes the current status of vehicle sales contracts to be concluded among residents of Turkey, it is still not possible to determine the sale value and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency.
- The obligations related to the contracts made within the scope of the Law numbered 4749 on Regulating Public Finance and Debt Management (in Turkish, “4749 sayılı Kamu Finansmanı ve Borç Yönetiminin Düzenlenmesi Hakkında Kanun”) are not subject to the amendment dated 19 April 2022, therefore may be fulfilled in foreign currency.
- The obligations regarding the creation, issuance, purchase and sale of capital market instruments (including foreign capital market instruments and depositary receipts and foreign investment fund shares) in foreign currency, within the framework of the Capital Market Law numbered 6362 (in Turkish, “6362 sayılı Sermaye Piyasası Kanunu”) and the regulations based on this Law, are not subject to the amendment dated 19 April 2022, therefore may be determined in foreign currency.
- The exceptions regarding the possibility to determine the price and other contractual payment obligations in foreign currency or indexed to foreign currency for contracts other than movable sales contracts indicated in the other paragraphs of Article 8 of the Communiqué are still valid.
As per the revaluation rates within the scope of Article 3/1 of the Law numbered 1567 regarding the Protection of the Value of Turkish Currency (in Turkish, “Türk Parası Kıymetinin Korunması Hakkında 1567 Sayılı Kanun”), in case of violation of the provisions of the Communiqué, each party to the contract shall be separately subject to an administrative fine from TRY 11,000 (approximately EUR 700) to TRY 100,000 (approximately EUR 6,000), which will be applied as twice in the event of repetition.
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