New Tax Implementation on Foreign Exchange Transactions

An amendment is made on the banking and insurance transaction tax (“BITT”) ratios for the foreign exchange transactions with the 1106 numbered Presidential Decree (the “Decree”) published on the 15.05.2019 dated and 30775 numbered Official Gazette. According to this, the BITT ratio which was applied as zero on the sale amount of foreign exchange transactions before, is determined as %0.1 as of 15.05.2019. Notwithstanding, BITT sale amount shall be applied as zero for the foreign exchange transactions listed below:

• The foreign exchanges to be made between banks and/or authorized institutions,
• Foreign exchange sales made to the Ministry of Treasury and Finance,
• Foreign exchange sales made to the credit debtor by the bank from which the foreign exchange credit is used or mediated.

The first BITT ratio implied for the foreign exchange transactions was determined as %0.1 by the decree of Council of Ministers’ on 1998; whilst this ratio was decreased to zero on 2008. It is foreseen that this Decree is made for decreasing the foreign exchange demand and providing an income to the treasury. According to some economists’ opinion, 3 to 6 billion TL contribution shall be made with this regulation in addition to the 18 billion TL of BITT income on 2018.

You may reach the Turkish text of the related Presidential Decree here.