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18 September 2018

Turkish Ministry of Treasury and Finance publishes press announcement on contracts concluded among Turkish residents to be set in Turkish Lira

Executive summary

Effective as of 13 September 2018, for contracts concluded among Turkish residents, the contract price and other payment obligations arising from such contracts must be set in Turkish Lira.1

On 17 September 2018, the Turkish Ministry of Treasury and Finance issued a press announcement regarding the framework of the Decision.

Detailed discussion

According to the press announcement, the most significant aspect to be emphasized regarding the scope of the aforementioned arrangements is that they only involve contracts concluded among persons resident in Turkey, as defined within Decision no.32.2

Moreover, as per the provisional, while addressing existing agreed-upon contracts for which the contract value was set in foreign currency prior to the publication of this Decision (Presidential Decision no.85), that are now subject to be redefined in Turkish Liras, it should be noted that both parties are required to be have been resident in Turkey on the date that the contract was concluded.

Also, the exception for certain cases deemed appropriate by the Ministry is ensured regarding the upcoming or running contracts.

While defining the scope of the cases to be considered as exceptions by the Ministry, the input costs or liabilities in terms of foreign currency are positioned as the issues that should primarily be taken into consideration.

For instance, contracts concluded by persons resident in Turkey that were able to obtain foreign currency loans without being subject to any restrictions, as per articles 17 and 17/A within the Decision no.32, thus arranging access to the foreign currency loans and therefore liable to foreign currency denominated obligations, will be considered within this context.

In this respect, the context of the respective regulation shall be determined as soon as possible taking into account the opinions of the relevant public institutions and other stakeholders, so as not to obstruct the economic activity and announced by the Turkish Ministry.

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ENDNOTES

2 Decision for the Protection of Turkish Currency no.32 (Decision No.32) dated 7 August 1989.

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Kuzey Yeminli Mali Müsavirlik A.S. Istanbul

  • Ates Konca
    ates.konca@tr.ey.com
  • Elif Akkaranfil
    elif.akkaranfil@tr.ey.com

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ATTACHMENT

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Document ID: 2018-6103

 
 

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