Dündar Sır Quarterly 2020/4

The Quarterly is prepared every quarter of a year in order to point out significant legislative amendments under Turkish law and the developments in case-law.
The Quarterly is prepared every quarter of a year in order to point out significant legislative amendments under Turkish law and substantial case laws.

1. The ban on determining lease amounts in foreign currencies shall continue.
The Ministry of Treasury and Finance (“Ministry”) made an announcement dated 13.10.2020 on contract amounts in Foreign Exchange on its website. The Announcement is about continuation of the ban on determining lease amounts in foreign currencies.

As known, leasing in foreign currency is prohibited with the Presidential Decree dated September 12, 2018 and No. 85 and the Ministry Communiqué No. 2018-32/52 published subsequently and the Communiqué determined the adjustment of these rents during the two-year transition period.

In this regard, The Ministry restates through the Announcement that the foreign exchange prohibition for lease agreements continues after the two-year transition period. Rent increase will be determined in accordance with twelve-month average of the CPI as per Article 344 of the Turkish Code of Obligation.

2. The limitation on dividend distribution period was extended for an additional three months.
The dividend distribution limitation that was set to last on 30.09.2020, was extended until 31.12.2020. To this extent, companies are able to distribute up to twenty-five percent of the net profit of the year-2019 until 31.12.2020.

3. Deadline for registration and upload of consents to Electronic Messages Management System is postponed.
As per public announcement of Ministry of Commerce dated 30.11.2020, deadlines is deferred to:
  • 31.12.2020 for those service providers which have over 150,000 consents to be uploaded, and
  • 31.05.2021 for those service providers which have under 150,000 consents to be uploaded.
What is Electronic Messages Management System? As per the Regulation on Commercial Communication and Electronic Messages dated 04.01.2020, electronic management is a system enabling both service providers and recipients of messages to carry out their approval transactions through a central channel and gives recipients right to reject receiving any messages established through.

4. Pursuant to opinion letter of the Ministry of Commerce dated 26.11.2020, commercial electronic messages can be sent to corporate e-mail accounts without taking any consent, since these accounts are not used for personal purposes, but commercial purposes.

5. The Personal Data Protection Authority published a summary of its decision evaluating the cross-border transfer of personal data of data controller relying on CETS No. 108.

The Personal Data Protection Authority provides assessment through the decision that:
  • Data controller’s cross-border transfer of personal data (based on The Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data (“CETS No. 108”)) does not comply with the requirements under Article 9 of the Law No. 6698.
  • Being a party to the CETS No. 108 might yield positive effects during an evaluation but it is not sufficient to declare that such party is a “safe country”.
  • Therefore, the cross-border transfer of personal data based only on CETS No. 108 without complying with the requirements under the Law No. 6698 constitutes the unlawful processing of personal data.
The Authority also evaluated the relationship between the restrictions under the Law No. 6698 on the Protection of Personal Data with regards to cross-border transfers and the legal status of the CETS No. 108, clarifying the status of the CETS No. 108 with regards to data privacy requirements. Such decision is a significant development since it confirms that the CETS No. 108 does not provide a valid mechanism for cross-border transfer of personal data as an alternative to the mechanisms under the Law No. 6698.

6. The duration of certain measures brought due to the COVID-19 has been extended.
(i) Short-term working allowance implementation and application periods have been prolonged.
The implementation period of short-term working allowance has been extended until 28.02.2021, for those employers who applied for the short-term working allowance until 31.12.2020 as per the principles under the Article 23 of Unemployment Insurance Law No. 4447.

Besides, the deadline for applying the short-term working allowance for the period after the date of 01.01.2021 has been extended to 31.01.2021.

(ii) The period of prohibition on termination of employment has been extended.
The implementation period of clause set forth in the first paragraph of Provisional Article 10 of the Labour Law No. 4857 prohibiting termination of employment contracts by the employer, except for immoral, dishonorable or malicious conducts of the employee, has been extended for two months as from 17.11.2020.

(iii) Unpaid-leave period has been extended.
The implementation period as set forth in the second paragraph of the Provisional Article 10 of the Labor Law No. 4857 granting employers right to send their employees completely or partially on unpaid leave is extended for two months as from 17.11.2020.

Please bear in mind that we expect extensions of the aforementioned periods through new legislative amendments.

7. Restructuring of the public receivables have been brought through the Law No: 7256.
The opportunity of restructuring is introduced for tax debts including Income, Corporate, Customs, Real Estate and Sanitation, VAT, Motor Vehicles and Special Consumption Taxes, all administrative fines, and Treasury receivables which were accrued before 31.08.2020. It is necessary to apply to the relevant administration until 31.12.2020 in order to benefit from the restructuring opportunity.

8. New asset peace incentives came into force through Law No: 7256.
(i) Individuals and legal entities can freely dispose of their money, gold, foreign exchange, securities and other capital market instruments held abroad without being subject to a tax audit or a tax assessment, if they duly notify these assets to Turkish banks or intermediary institutions by 30.06.2021.

(ii) Besides, if the capital advances recorded in taxpayers’ legal books as of November 17.11.2020 are compensated by bringing money, gold, foreign exchange, securities and other capital market instruments held abroad to Turkey before 17.11.2020, taxpayers can benefit from the provision if the capital advances are removed from legal book entries.

9. The period for decreased value-added tax (VAT)

application on certain goods and services has been extended. It has been decided to apply 8% VAT for workplace rents until 31.05.2021. It has been decided to apply 1% VAT for accommodation, food & beverage services until 31.05.2021.

i. 15th Civil Chamber of Court of Cassation., File No: 2020/1714, Decision Dated 02.10.2020: As is known, in case both parties to an agreement are Turkish citizens or companies, it is mandatory for them to sign the agreement in Turkish. However, an agreement between two Turkish parties with a foreign element (e.g., controlling shareholder of one party is a foreigner), can be signed in a foreign language.
Such would not constitute a violation of the Law No. 805 on the Compulsory Use of Turkish in Economic Enterprises.

ii. Constitutional Court, File No: 2017/35947, Decision Dated 09.09.2020: In order to block access to a website, the website must cause an urgent situation that needs remedy; a concrete link between the situation and the grounds for the measure must exist; and the measure must find a balance between the freedom of expression and the democratic public order.

iii. Constitutional Court, File No: 2016/13010, Decision Dated 14.10.2020: Review and inspection of the employee's corporate e-mail contents by the employer and termination of the employment contract based on these correspondences violates the right to demand protection of personal data within the scope of respect to privacy and freedom of communication. Please do not hesitate to contact us if you have any queries regarding the above matters.
Best Regards.

Selim DÜNDAR, Attorney-at-Law