The prohibition of determining the contract price in foreign currency or based on foreign currency is imposed for many contracts (namely, chattel and real estate sales and leasing, financial leasing, labour, service and construction agreements) that are concluded between the Turkish residents, with 13/9/2018 dated and 85 numbered “the Decree on the Amendment of 32 numbered Decree regarding the Protection of Turkish Currency” (“Presidential Decree”). Under this new regulation, the necessary of amendment of the contract price converted into Turkish currency is needed for the contracts in the scope of the prohibition. At this point, a stamp tax problem occurs for the amended contracts.

On the 30597 numbered Official Gazette dated of 16/11/2018, a new Communique has been announced by the Ministry of Treasury and Finance. The Communique numbered 2018-32/52 is related to the previously announced 2008-32/34 numbered Communique and the revision of Article 8 of the relevant Communique based on the Amendment of the Decree No.32 on Protection of the Value of Turkish Monetary Currency.

From a broad perspective, the application of the regulations based on the Decree and the relevant Communiques have not been impacted, whereas the exemptions have been elaborated further. Below we have outlined the amendments on the Article 8, announced by the Communique on the date of November 16, 2018.

You can access our previous publication on the Communique by clicking here.

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.