In accordance with the publication of the Law that was published in the 09.08.2016 dated Official Gazette numbered 29796, it has been announced that the Withholding Tax Return and Monthly Premium & Service Declarations are to be combined under a single return called “Withholding Tax and Premium Service Return”. Within the scope of this announced statement, the single return application was postponed to October 1, 2018 for Türkiye.

As per the Presidential Decree announced on September 13, 2018, there has been uncertainty on the parties located in Türkiye, which were to be prohibited from signing foreign currency-based contracts. The uncertainty has mostly raised a question for the parties that have a casual connection with parties outside Türkiye, have non-Turkish shareholder/ownership, and/or have an obligation of foreign currency-based payments to abroad with the services, consultancy, and relevant agreements.

Regulation No: 2008-32/34 Regarding Amendment On The Regulation (Regulation No: 2018-32/51)

Article 1- (1) The abrogated Article 8 of the Regulation Regarding the Decree No.32 on Protection of the Value of Turkish Currency (Regulation No: 2008-32/34) which is published in 28/2/2008 dated and 26801 numbered Official Gazette, is revised as follows.

“The Agreements in Foreign Currency and the Agreements Based on Foreign Currency

Article 8 – (1) Residents in Türkiye; shall not settle the contract price in real estate sale agreements including residences and roofed working places of which subject is the real estates in the country including free zones, and other payment obligations arise from these agreements that are signed between each other, as in foreign currency or based on foreign currency.

(2) Residents in Türkiye; shall not settle the contract price in real estate leasing agreements including housing premises and roofed working places of which subject is the real estates in the country including free zones, and other payment obligations arise from these agreements that are signed between each other, as in foreign currency or based on foreign currency.

(3) Residents in Türkiye; shall not determine labor agreements’ contract price and other payment obligations arise from these agreements, except the ones performed abroad, in foreign currency or based on foreign currency.

Subsistence (Daily Subsistence)

The concepts of travel allowance and subsistence are constantly being confused in our legislation. Although there are very important differences, it is known that SSI premiums are deducted from travel allowance and subsistence is not included in SSI premiums. Below are Mr. Resul Kurt and Mr. Mehmet Maç’s articles on the subject.

As subsistence is included in the Income Tax Law Article 24 which mentions the equivalents of expenses, they are fundamentally a business-related expense and not an allowance provided to an employee. However, they happen to be a benefit and allowance in cases when they are paid in lump sum under the name of daily subsistence and not as an exact and certified travel expense and when partially saved by the employees. The amount beyond the legal degree qualifies as a payment subject to taxation.