Communiqué No. 2008-32/34 Regarding The Decree No. 32 On The Protection Of The Value Of The Turkish Currency & Amendments To The Provisional Article 8 Of The Decree No. 32

Version 8 – Communiqué No. 2008-32/34 Regarding the Decree No. 32 On the Protection of the Value of the Turkish Currency

Turkish Official Gazette no. 30557 dated 06.10.2018

Contracts Denominated in or Indexed to Foreign Currency

 

ARTICLE 8

(1) In the immovable property sale contracts executed between persons residing in Turkey in relation to immovable property, including houses and roofed workplaces located within the country, including free zones; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

(2) In the immovable property lease contracts executed between persons residing in Turkey in relation to immovable property, including houses and roofed workplaces located within the country, including free zones; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

(3) In the employment contracts executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency, save for contracts executed regarding duties to be performed abroad.

(4) In the service contracts executed between persons residing in Turkey, including those executed for consultancy, agency and transportation services but excluding the contracts specified hereinbelow; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

a) Service contracts the parties of which are persons who are not citizens of the Republic of Turkey,

b) Service contracts executed within the scope of export, transit trade, sales and deliveries considered as export, and foreign exchange generating services and activities,

c) Service contracts executed within the scope of activities to be performed abroad by persons residing in Turkey,

ç) Service contracts executed by and between persons residing in Turkey in relation to electronic communications which start in Turkey and end abroad and start abroad and end in Turkey.

(5) In the construction agreements executed by and between persons residing in Turkey; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency, save for contracts related to ship construction, repair and maintenance as defined in the Law on the Amendment of the Law No. 4490 Dated 16/12/1999 on the Turkish International Ship Registry Law and the Statutory Decree No. 491.

(6) In the contracts for the sales of movable properties executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for the contracts regarding sale of vehicles including construction equipment.

(7) In the contracts for the lease of movable properties executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for the contracts for lease of vehicles including construction equipment.

(8) In the sale contracts for software produced abroad within the scope of information technologies and license and service contracts for hardware and software executed by and between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(9) In the financial leasing contracts related to vessels as defined in the Law on the Amendment of the Turkish International Ship Registry Law No. 4490 and the Statutory Decree No. 491; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(10) Prices in financial leasing contracts to be executed under Articles 17 and 17/A of the Decree No. 32 on the Protection of the Value of Turkish Currency can be denominated in foreign currency.

(11) In the employment contracts the parties of which reside in Turkey but not are citizens of the Republic of Turkey, the contract price and other payment obligations arising from those contracts can denominated in or indexed to foreign currency.

(12) In the contracts signed by public institutions and organizations and the Turkish Armed Forces Foundation; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for sales and lease contracts regarding immovable property.

(13) Save for sales and lease contracts regarding immovable property and employment contracts; the contract price and other payment obligations arising from those contracts entered into by contractors with the third parties can be denominated in or indexed to foreign currency, provided that those contracts are executed within the scope of the performance of tenders, conventions and international treaties denominated in foreign currency or indexed to foreign currency to which public institutions and organizations are a party to.

(14) In the contracts signed by banks in relation to transactions of the Ministry of Treasury and Finance within the scope of the Law No. 4749 and dated 28/3/2002 on the Regulation of Public Finance and Debt Management; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(15) Capital market instruments (including foreign capital market instruments and depository receipts and foreign investment fund shares) can be issued in foreign currency, and the obligations for their issuance, purchase, sale and related transactions can be denominated in foreign currency within the framework of the Capital Markets Law No. 6362 and the regulations made on the basis of the same, reserving the provisions of the Decree No. 32on the Protection of the Value of Turkish Currency.

(16) In the employment and service contracts signed by the branches, representative offices, liaison offices of foreign-resident persons in Turkey or the companies in Turkey in which such foreign-resident persons directly or indirectly have a share of fifty percent or more or by the free zone companies within the scope of the activities of such foreign-resident persons in the free zones; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(17) Turkish-resident commercial airline entities engaged in passenger, cargo or mail carriage activities; Turkish-resident companies which provide technical maintenance services for air transport vehicles and the engines, accessories and parts thereof; and Turkish-resident public or private law entities which are licensed or authorized to provide ground handling services at airports within the scope of the civil aviation legislation or businesses or companies established by those entities or the partnerships in which those entities directly or indirectly hold at least 50% share in the capital can execute contracts, which contain prices in foreign currency or prices indexed to foreign currency, with persons residing in Turkey, except for real estate sale contract, real estate lease contracts and employment contracts.

(18) In cases where negotiable instruments are issued within the scope of contracts in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article, the amounts on such negotiable instruments cannot be denominated in or indexed to foreign currency either.

(19) Contracts indexed to precious metals and/or commodities, the price of which is determined in foreign currency in the international markets, and thus indirectly indexed to foreign currency are considered as contracts indexed to foreign currency within the scope of the application of Article 4(g) of the Decree No. 32 on the Protection of the Value of Turkish Currency.

(20) The branches, representation offices, offices and liaison offices of Turkish-resident persons located abroad, the funds controlled or managed abroad by Turkish-resident persons, the companies incorporated abroad in which Turkish-resident persons have a share of fifty percent or more, and the companies incorporated abroad which are directly or indirectly owned by Turkish-resident persons are considered as residents of Turkey within the scope of the application of Article 4(g) of the Decree No. 32 on the Protection of the Value of Turkish Currency.

(21) For contracts to be executed as per this article; contracts which are covered by the exception but executed before the effective date of the Provisional Article 8 of the Decree No. 32 on the Protection of the Value of Turkish Currency are also exempt from the provisions of the mentioned provisional article.

(22) Vehicle leasing contracts, including those for construction equipment, executed before the effective date of the Provisional Article 8 of the Decree No. 32 on the Protection of the Value of Turkish Currency are exempt from the provisions of the mentioned provisional article.

(23) Amounts in contracts, in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article, should be re-determined by the parties in Turkish currency within the scope of the Provisional Article 8 of the Decree No. 32 on the Protection of the Value of Turkish Currency.

(24) If parties to an agreement, the contract price and other payment obligations of which cannot be denominated in or indexed to foreign currency, cannot mutually agree on re-determination of the contract value in Turkish currency within the scope of the Provisional Article 8 of the Decree No. 32, then the amounts denominated in or indexed to foreign currency in the already executed contracts shall be re-determined by means of increasing the Turkish currency equivalent of such amounts calculated over the indicative selling rate of exchange of the Central Bank of Turkey applicable on 2/1/2018 on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute starting from 2/1/2018 until the re-determination of the relevant contact value.

The amounts denominated in or indexed to foreign currency under the lease contracts for houses and roofed workplaces executed before the effective date of Provisional Article 8 of the Decree No. 32 are re-determined in Turkish currency to be applicable for a period of two years as per the first paragraph of this sub-article. However, unless otherwise agreed by the parties, the rent determined in Turkish currency as per the mentioned paragraph is revised by means of applying an increase on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute starting from date of determination until the end of the relevant rental year, and such rent shall be applicable for a period of one year starting from the rental year when the determination in Turkish currency is made. The Turkish currency lease price of the next rental year is determined by means of increasing the rent of the previous rental year on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute, and the Turkish currency lease price so increased shall be applicable until the end of the two years’ period stipulated in this sub-article.

The provisions of this sub-article do not apply to the collected or deferred receivables under the contracts in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article.

(25) If the parties to whom exception is granted in this article mutually agree to execute new contracts in Turkish currency or re-determine in Turkish currency the amounts in the existing contracts, which are in foreign currency or indexed to foreign currency, as per Provisional Article 8 of the Decree No. 32 on the Protection of the Value of Turkish Currency, then the amounts in the contracts will be determined in Turkish currency.”

Version 9 – Communiqué No. 2008-32/34 Regarding the Decree No. 32 On the Protection of the Value of the Turkish Currency

Turkish Official Gazette no. 30597 dated 16.11.2018

Contracts Denominated in or Indexed to Foreign Currency

 

ARTICLE 8

(1) In the immovable property sale contracts executed between persons residing in Turkey in relation to immovable property, including houses and roofed workplaces located within the country; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

(2) In the immovable property lease contracts executed between persons residing in Turkey in relation to immovable property, including houses and roofed workplaces located within the country; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

(3) In the immovable property sale and lease contracts to which persons who reside in Turkey but not a citizen of Turkey or persons specified in sub-article nineteen of this article are a party either as buyer or as lessee; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(4) In the immovable property lease contracts for the lease of accommodation facilities, which are certificated by the Ministry of Culture and Tourism, for their management; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(5) In the immovable property lease contracts for the lease of duty-free shops; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(6) In the employment contracts executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency, save for contracts which executed regarding duties to be performed abroad and to which seamen are a party.

(7) In the service contracts executed between persons residing in Turkey, including those executed for consultancy, agency and transportation services but excluding the contracts specified hereinbelow; the contract price and other payment obligations arising from those contracts cannot be denominated in or indexed to foreign currency.

a) Service contracts the parties of which are persons who are not citizens of the Republic of Turkey,

b) Service contracts executed within the scope of export, transit trade, sales and deliveries considered as export, and foreign exchange generating services and activities,

c) Service contracts executed within the scope of activities to be performed abroad by persons residing in Turkey,

ç) Service contracts executed by and between persons residing in Turkey which start in Turkey and end abroad, which start abroad and end in Turkey, or which start abroad and end abroad.

(8) In the construction agreements which executed by and between persons residing in Turkey and which contain costs in foreign currency; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(9) In the contracts for the sales of movable properties executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for the contracts regarding sale of vehicles.

(10) In the contracts for the lease of movable properties executed between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for the contracts for lease of vehicles.

(11) In the sale contracts for software produced abroad within the scope of information technologies and license and service contracts for hardware and software, which are produced abroad, executed by and between persons residing in Turkey; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(12) In the financial leasing contracts related to vessels as defined in the Law on the Amendment of the Turkish International Ship Registry Law No. 4490 and the Statutory Decree No. 491; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(13) Prices in financial leasing contracts to be executed under Articles 17 and 17/A of the Decree No. 32 can be denominated in foreign currency.

(14) In the employment contracts the parties of which reside in Turkey but not are citizens of the Republic of Turkey, the contract price and other payment obligations arising from those contracts can denominated in or indexed to foreign currency.

(15) Reserving the provisions of sub-article sixteen, in the contracts signed by public institutions and organizations or the Turkish Armed Forces Foundation; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency, save for sales and lease contracts regarding immovable property.

(16) In the contracts (other than immovable property sale contracts and employment contracts) to be signed by the contractors or the companies in charge and their contracting parties with the third parties within the framework of the projects to be realized in the scope of the performance of tenders, conventions and international treaties denominated in foreign currency or indexed to foreign currency to which public institutions and organizations are a party, or in the contracts to be entered into within the framework of the mentioned projects; the contract price and other payment obligations can be denominated in or indexed to foreign currency.

(17) In the contracts signed in relation to transactions within the scope of the Law No. 4749 on the Regulation of Public Finance and Debt Management; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency. In the contracts signed by banks in relation to those transactions, the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(18) Capital market instruments (including foreign capital market instruments and depository receipts and foreign investment fund shares) can be issued in foreign currency, and the obligations for their issuance, purchase, sale and related transactions can be denominated in foreign currency within the framework of the Capital Markets Law No. 6362 and the regulations made on the basis of of the same, reserving the provisions of the Decree No. 32.

(19) In the employment and service contracts signed by the branches, representative offices, liaison offices of foreign-resident persons in Turkey or the companies in Turkey, in which such foreign-resident persons directly or indirectly have a share of fifty percent or over which such foreign-resident persons have joint control and/or control, or signed by the free zone companies as employer or service receiver within the scope of the activities of such foreign-resident persons in the free zones; the contract price and other payment obligations arising from those contracts can be denominated in or indexed to foreign currency.

(20) Turkish-resident commercial airline entities engaged in passenger, cargo or mail carriage activities; Turkish-resident companies which provide technical maintenance services for air transport vehicles and the engines, accessories and parts thereof; and Turkish-resident public or private law entities which are licensed or authorized to provide ground handling services at airports within the scope of the civil aviation legislation or businesses or companies established by those entities or the partnerships in which those entities directly or indirectly hold at least fifty percent share in the capital can execute contracts, which contain prices in foreign currency or prices indexed to foreign currency, with persons residing in Turkey, except for real estate sale contract, real estate lease contracts and employment contracts.

(21) In cases where negotiable instruments are issued within the scope of contracts in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article, the amounts on such negotiable instruments cannot be denominated in or indexed to foreign currency either. However, such negotiable instruments, which were issued and circulated before the date of entry into force of the Provisional Article 8 of the Decree No. 32, are exempt from the provisions of the mentioned provisional article.

(22) Contracts indexed to precious metals and/or commodities, the price of which is determined in foreign currency in the international markets, and thus indirectly indexed to foreign currency are considered as contracts indexed to foreign currency within the scope of the application of Article 4(g) of the Decree No. 32. However, service contracts related to transportation activities can be indexed to fuel oil prices.

(23) The branches, representation offices, offices and liaison offices of Turkish-resident persons located abroad, the funds controlled or managed abroad by Turkish-resident persons, the companies incorporated abroad in which Turkish-resident persons directly or indirectly have a share of fifty percent or more are considered as residents of Turkey within the scope of the application of Article 4(g) of the Decree No. 32. However, if the contract is performed abroad, the provisions of this paragraph do not apply.

(24) For contracts to be executed as per this article; contracts which are covered by the exception but executed before the effective date of the Provisional Article 8 of the Decree No. 32 are also exempt from the provisions of the mentioned provisional article.

(25) Vehicle leasing contracts and sale contracts of commercial vehicles for passenger transportation, which have been executed before the effective date of the Provisional Article 8 of the Decree No. 32, are exempt from the provisions of the mentioned provisional article.

(26) Financial leasing contracts related to movable and immovable properties, which have been executed before the effective date of the Provisional Article 8 of the Decree No. 32, are exempt from the provisions of the mentioned provisional article.

(27) Amounts in contracts, in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article, should be re-determined by the parties in Turkish currency within the scope of the Provisional Article 8 of the Decree No. 32.

(28) If parties to an agreement, the contract price and other payment obligations of which cannot be denominated in or indexed to foreign currency, cannot mutually agree on re-determination of the contract value in Turkish currency within the scope of the Provisional Article 8 of the Decree No. 32, then the amounts denominated in or indexed to foreign currency in the already executed contracts shall be re-determined by means of increasing the Turkish currency equivalent of such amounts calculated over the indicative selling rate of exchange of the Central Bank of Turkey applicable on 2/1/2018 on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute starting from 2/1/2018 until the re-determination of the relevant contact value.

The amounts denominated in or indexed to foreign currency under the lease contracts for houses and roofed workplaces executed before the effective date of Provisional Article 8 of the Decree No. 32 are re-determined in Turkish currency to be applicable for a period of two years as per the first paragraph of this sub-article. However, unless otherwise agreed by the parties, the rent determined in Turkish currency as per the mentioned paragraph is revised by means of applying an increase on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute starting from date of determination until the end of the relevant rental year, and such rent shall be applicable for a period of one year starting from the rental year when the determination in Turkish currency is made. The Turkish currency lease price of the next rental year is determined by means of increasing the rent of the previous rental year on the basis of the monthly rates of change in the consumer price index (CPI) set forth for each month by the Turkish Statistical Institute, and the Turkish currency lease price so increased shall be applicable until the end of the two years’ period stipulated in this sub-article.

Out of the contracts in which the contract price and other payment obligations cannot be denominated in or indexed to foreign currency as per this article; the receivables collected or delayed, and deposits given within the scope of the immovable property lease contracts, and the negotiable instruments circulated within the scope of the performance of the contracts are exempted from the provisions of this sub-article.

2018-11-16T20:07:26+00:00