Although capital companies residing in Turkey are free to use Turkish lira-denominated loans through banks from abroad; these capital companies can only obtain foreign currency loans from persons residing abroad through banks and within the framework of the principles contained in the relevant decision on the Protection of the Value of the Turkish Currency.
In this direction, with the increase in foreign-sourced loans used by the private sector, with the amendment made in the Decree in 2018, the condition of obtaining foreign currency income for the use of foreign currency loans from domestic and abroad has been introduced. Since 2018, the exceptions foreseen for this rule have been expanded with new regulations, taking into account the needs.
One of these exceptions is foreign currency loans used between group companies. To mention, in accordance with the relevant legislation, legal entities established in Turkey, 100% of which belong to foreign shareholders residing outside Turkey, will be able to use foreign currency loans from group companies with foreign capital, exempted from the foreign currency income criteria.
In the use of foreign currency loans within the scope of this article;
- In case the company residing abroad, which will extend the loan, has 100% direct ownership over the group company residing in Turkey, in addition to the submission of the loan agreement and repayment plan to the intermediary bank by the group company residing in Turkey, certifying that all of its capital is owned by a company with foreign capital residing abroad, which will extend the loan,
- In case the company residing abroad, which will extend the loan, indirectly owns 100% of the group company residing in Turkey, In addition to the submission of the loan agreement and repayment plan to the intermediary bank by the group company residing in Turkey, The capitals of the foreign company that will extend the loan and the group company residing in Turkey that will use the loan must be met from the same foreign capital. That is, the owners of both companies must be the same,
Afterwards, these issues should be documented to the intermediary bank with trade registry gazettes or letters from the relevant official authorities.
AT THE STAGE OF GRANTING THE LOAN;
It is essential that the foreign currency loan obtained from abroad for the company settled in Turkey is sent directly by the creditor (the company providing the loan) to the bank that mediates the use of the loan in Turkey, with a loan statement on behalf of the borrower company. In addition, it is not possible to send foreign currency loans obtained from abroad by people residing in Turkey to the accounts of people other than the person using the loan in banks in Turkey.
In case of doubts about the nature of the creditor (the company providing the credit), the bank resident in Turkey, which mediates this loan obtained from abroad, requests the credit user to certify that the institution from which the credit is taken is the institution authorized to give credit according to the legislation of the relevant country. The loan user has the document, which shows that the lending institution is authorized to extend the loan, obtained from the official authorities of the relevant country, approved by the Turkish diplomatic representation or economic consultancy in the relevant country and submits it to the relevant bank.
ABOUT TAXES PAYABLE UNDER THE CREDIT AGREEMENT
Article 30 of Law No. 5035 published in the Official Gazette dated January 2004 and numbered 25334 and the amendment made to paragraph 23 of the Table No. 2 annexed to the Stamp Duty Law No. 488 and the papers to be issued for the purpose of obtaining and repayment of loans obtained from banks, international institutions and foreign credit institutions abroad pursuant to Article 31 of this Law and the third paragraph of Article 123 of the Law on Fees No. 492 as amended, the annotations and guarantees placed on these papers shall be exempt from stamp duty and duty.
31 (2) From the expression foreign credit institutions; the institutions that are authorized to provide financial resources according to the legislation of the country where these organizations are located and one of the main fields of activity is to give credit; The term international institutions should be understood as the World Bank (International Bank for Reconstruction and Development), the International Monetary Fund, the European Bank for Reconstruction and Development, the Islamic Development Bank and similar institutions that provide loans to developing countries to finance their development or the restructuring of a country.