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Table of Contracts for which Price is Prohibited to be Determined in Foreign Currency or Indexed to Foreign Currency Directly or Indirectly

  Type of Contract [i] Restriction Communique Article  
Subject Not subject
   
Made[ii] between persons residing in Turkey[iii] Real Estate Sales[iv] Contracts Yes   8/1  
 (i) Persons residing in Turkey[v] who do not have citizenship ties with the State of the Republic of Turkey, or, (ii) non-resident persons in Turkey; real estate sales contracts to which branches, representation offices, offices, liaison offices, companies that directly or indirectly own fifty percent or more shares or have joint control and/or control, and companies in free zones as buyers within the scope of their activities in the free zone   Yes 8/3  
Real estate sales contracts, including residences and roofed workplaces, whose subject is real estate located in free zones, to be concluded among Turkish residents.   Yes 8/1  
Real Estate Lease Contracts Yes   8/2  
(i) Persons residing in Turkey who do not have citizenship ties with the State of the Republic of Turkey, or, (ii) non-resident persons in Turkey; real estate sales contracts to which branches, representation offices, offices, liaison offices, companies that directly or indirectly own fifty percent or more shares or have joint control and/or control, and companies in free zones as buyers within the scope of their activities in the free zone   Yes 8/3  
Real estate lease contracts regarding the leasing of accommodation facilities certified by the Kültür ve Turizm Bakanlığı for the purpose of operation   Yes 8/4  
Real estate lease contracts for the rental of duty-free shops   Yes 8/5  
Foreign currency or foreign currency indexed auctions to which public institutions and organizations are parties, contracts, and within the projects to be carried out within the scope of the execution of international contracts; contractors or commissioned companies, and that the parties with which they have signed contracts with third parties, or real estate lease contracts to be concluded within the framework of the aforementioned projects   Yes 8/16  
Financial lease contracts for real estates concluded before 13.9.2018   Yes 8/26  
Persons residing in Turkey; that they will agree among themselves; Real estate lease contracts, including residences and roofed workplaces, the subject of which is real estate located in free zones   Yes 8/2  
Business Contracts Yes   8/6  
Employment contracts to be executed abroad   Yes 8/6  
Employment contracts to which seafarers are a party   Yes 8/6  
Employment contracts to which persons residing in Turkey who do not have citizenship of the Republic of Turkey are a party   Yes 8/14  
Employment contracts to which non-residents have branches, representative offices, offices, liaison offices, companies in which they directly or indirectly hold fifty percent or more shares or joint control and/or control, and companies in free zones as employers within the scope of their activities in the free zone in Turkey   Yes 8/19  
Service Contracts [vi] Yes   8/7  
Consulting, intermediation and transportation contracts Yes   8/7  
Service contracts to which persons who do not have citizenship ties with the Republic of Turkey are a party   Yes 8/7(a)  
Service contracts within the scope of export, transit trade, sales and deliveries considered as exports, and foreign exchange earning services and activities   Yes 8/7(b)  
Service contracts concluded within the scope of activities to be carried out abroad by persons residing in Turkey   Yes 8/7(c)  
Service contracts that starting in Turkey and ending abroad, starting abroad and ending in Turkey, or starting abroad and ending abroad between persons residing in Turkey.   Yes 8/7(ç)  
Accommodation service contracts to be concluded by residents of Turkey in accommodation facilities certified by the Kültür ve Turizm Bakanlığı   Yes 8/7(d)  
Sales contracts for software produced abroad within the scope of information technologies, and license and service contracts for hardware and software produced abroad   Yes 8/11  
Contracts of services to which non-residents have branches, representative offices, offices, liaison offices, companies in which they directly or indirectly hold fifty percent or more shares or joint control and/or control, and companies in free zones as service recipients within the scope of their activities in the free zone in Turkey   Yes 8/19  
Contracts for Work and Labor Yes   Decision No. 32, 4/g and Communiqué 8/8  
Contracts for Work and Labor with costs in foreign currency   Yes 8/8  
Securities sales and lease contracts [vii] [viii]   Yes 8/9,10  
Vehicle Rental and Sales Contracts Yes   8/9,10  
Construction machinery rental and sales contracts   Yes 8/9,10  
Financial leasing contracts for ships defined in Law No. 4490 and Law No. 491 Amending the Decree Law   Yes 8/12  
Financial leasing contracts to be made within the scope of Articles 17 and 17/A of Decision No. 32   Yes 8/13  
Financial leasing contracts for movables executed before 13.9.2018   Yes 8/26  
Vehicle rental and passenger transportation commercial vehicle sales contracts concluded before 13.9.2018   Yes 8/25  
Contracts to which Public Institutions and Organizations or “TSK Güçlendirme Vakfı” companies are a party[ix]   Yes 8/15  
Real estate sales/lease contracts signed by Public Institutions and Organizations, or TSK Güçlendirme Vakfı companies Yes   8/15  
Foreign currency or foreign currency indexed auctions to which public institutions and organizations are parties, contracts, and within the projects to be carried out within the scope of the execution of international contracts; contractors or commissioned companies, and that the parties with which they have signed contracts with third parties, or contracts to be concluded within the framework of the aforementioned projects   Yes 8/16  
Although within the scope of the above, contracts and employment contracts, the subject of which is real estate sales Yes   8/16  
Contracts made in relation to the transactions conducted within the scope of the Law No. 4749 on the Regulation of Public Finance and Debt Management and the contracts to which the banks are a party in relation to these transactions   Yes 8/17  
Obligations regarding the creation, issuance, trading and transactions of capital market instruments (including foreign capital market instruments and depository receipts and foreign investment fund shares) in foreign currency within the framework of the capital market legislation   Yes 8/18  
(i) Commercial airlines operating in Turkey, carrying passengers, cargo or mail; (ii) companies providing technical maintenance services for air transport vehicles, engines and their components and parts; (iii) Public or private legal entities that are licensed or authorized to operate at airports within the scope of civil aviation legislation, businesses and companies established by these organizations and partnerships in which they directly or indirectly hold at least fifty percent of their shares. their contracts   Yes 8/20  
Although within the scope above, contracts and employment contracts whose subject is the sale or lease of real estate Yes   8/20

 

[i] The prohibition covers other (subsidiary) payment obligations arising from the contract as well as the contract price. It is also not possible to determine the prices in the negotiable instruments to be drawn up within the scope of the contracts where the contract price and other payment obligations arising from these contracts cannot be determined in foreign currency or indexed to foreign currency. However, there is no obligation to convert into Turkish Lira in terms of overdue or overdue receivables, deposits given within the scope of real estate lease contracts, and valuable papers circulated within the scope of performance of contracts.

 

[ii] Contracts with persons residing outside Turkey are not within the scope of the ban.

 

[iii] Persons residing in Turkey are defined in Decision No. 32 as “real and legal persons who have their legal residence in Turkey, including Turkish citizens who work abroad, self-employed and self-employed”. However, persons residing in Turkey abroad; branches, representative offices, offices, liaison offices, funds it operates or manages, companies that hold 50% or more direct or indirect shareholdings are considered as resident in Turkey within the scope of the implementation of this article of Decision No. 32. However, in case the contract is executed abroad, these persons are not considered to be resident in Turkey.

 

[iv] The term “Real Estates” in this table refers to immovables located in Turkey. Real estates located in free zones will not be considered within the scope of this term.

 

[v] With the amendment dated 19 January 2022 made in the “Sermaye Hareketleri Genelgesi” dated May 2, 2018, it is stipulated that the payment obligations of the real estates purchased in Turkey by persons who do not have citizenship ties with the Republic of Turkey will be fulfilled in foreign currency. However, it was stated that this foreign currency would be sold to a bank before the title deed transactions, stating the reason, and that it would be sold to the Central Bank of the Republic of Turkey by the bank. Foreign exchange sales to banks can only be made by the buyer, seller, their proxies, or representatives of the relevant real estate.

It was stated that the payment should be made in Turkish lira to the concerned parties

 

[vi] The definition of “service contracts” is not made in the Communiqué, and the issue of which type of employment contracts other than those mentioned in the Communiqué will be considered “service contracts”, and the situation of mixed and sui generis contracts, which include acts of the type of employment, is controversial. Therefore, the legal nature of each contract must be determined separately.

 

[vii] Communiqué No. 2022-32/66 (“Amendment Communiqué”), which amends the Communiqué No. 32 on the Protection of the Value of Turkish Currency No. 2008-32/34 (“Communiqué on Amendment”), was published in the Official Gazette No. 31814 on April 19, 2022 and entered into force. With the amendment introduced, it is obligatory to fulfill and accept the contractual payment obligations in Turkish Lira, in case the contract price and other payment obligations arising from these contracts are determined in foreign currency or indexed to foreign currency in movable sales contracts to be concluded between residents of Turkey, excluding vehicle sales contracts.

 

[viii] In the statement made by the Hazine ve Maliye Bakanlığı regarding the Amendment Communiqué, it was stated that the condition of fulfilling and accepting payment obligations in Turkish currency within the scope of invoices issued before 19 April 2022 regarding securities sales contracts is not required. In addition, it has been stated that, within the scope of the performance of the securities sales contracts concluded between them before 19 April 2022, the payment obligations within the scope of foreign currency negotiable instruments entered into circulation before 19 April 2022 are not required to be fulfilled and accepted in Turkish currency. In the statement of the Ministry, it was also stated that it is not possible to use payment instruments such as checks etc. issued in foreign currency on 19 April 2022 and after this date, in fulfilling the payment obligations of the persons residing in Turkey, which are the subject of movable sales contracts concluded or to be concluded.

 

[ix] It is clearly stated with the Amendment Communiqué that it is possible to decide, pay and accept the contract price and other payment obligations arising from these contracts in foreign currency or indexed to foreign currency in contracts other than real estate sales and real estate rentals to which public institutions and organizations or TSK Güçlendirme Vakfı companies are a party.

 

 

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