Quarterly 2021/4

The Quarterly is prepared every quarter in order to point out significant legislative amendments under Turkish law and developments in case-law.
1. New deposit product dubbed “Foreign Exchange-Protected Turkish Lira Deposit” is introduced to combat volatility in FX rates.
As of September 2021, the Central Bank of the Republic of Turkey (“CBRT”) has cut the interest rates from %19 to %14, despite the increasing inflation rate. Therefore, the Turkish lira has been highly volatile against FX rates and its value has sharply plummeted lately. In order to protect depositors from such volatility and protect Turkish lira, Foreign Exchange-Protected Turkish Lira Deposit System is unveiled by the President on December 20, 2021, and the details were published on the Official Gazette dated December 21, 2021.

In this regard, the details of this FX-Protected TRY Deposit System are as follow:
  • Real persons (legal persons is excluded) residing in Turkey will open an FX-Protected TRY deposit account with 3 months, 6 months, or 1 year maturity.
  • Interest that will be paid to the depositor and difference in exchange rates at the beginning and at end of the maturity will be compared, and the depositor will be paid whichever is higher.
  • Regardless of exchange rate on the day the account is opened and exchange rate at the end of the maturity, the principal and interest will be paid to the depositor by the bank.
  • If the amount to be calculated using the exchange rate applicable at the end of the maturity is higher than the sum of the principal and the interest, the difference will be covered by the CBRT.
  • In case of a withdrawal before maturity, the depositor will not be eligible for the incentive.

2. The Regulation on Payment Services and Electronic Money Issuance and Payment Service Providers was published on December 1, 2021.
The Regulation provides that only intangible assets issued in exchange for a one-to-one fiat currency (tr. itibari para), created virtually and distributed over digital networks will be accepted as e-money. To that extent, crypto assets (such as Bitcoin, Ethereum,) based on assets other than fiat money will continue not to be considered e-money.

Regulation enables the Payment and Electronic Money Institutions to cooperate with international peers in accordance with their purpose or activities with legal entities residing abroad after obtaining approval from the Central Bank of the Republic of Turkey. This foreign legal entity must also be authorized by the relevant authorities where its HQ is based to provide payment services or to issue e-money.

3. The minimum wage was increased to Net TRY 4.250 from Net TRY 2.825,90. The income tax and stamp tax on the minimum wage was removed.

4. The revaluation rate, which is applied to annually increase taxes, fines, premium payments, is announced at the rate of 36,20% for 2021. The president has discretion to decrease this rate by 50%.
5. The revaluation rate is determined 18,1% for Property Tax and %25 for Motor Vehicles Tax.

6. The President is given the authority to increase Special Consumption Tax rate in automotive and tobacco products by 3 times.
7. Effective date of the accommodation tax is postponed to January 1, 2023 from January 1, 2022.
8. Stamp duty, fee and resource utilization support fund exemption applied to asset management companies have become permanent. On the other hand, the exemption granted to these companies regarding the tax on banking and insurance transactions is lifted.

9. The Turkish Competition Authority has decreased the vertical block exemption market share threshold from 40%to 30%.
The vertical block exemption regime provides immunity from the scope of Protection of Competition Law No. 4054 for vertical agreements on certain conditions. One of these conditions, the market share threshold, was reduced from 40% to 30%. Accordingly, the suppliers/buyers can benefit from the vertical block exemption provided that they do not hold a market share above 30% in the relevant market.

10. The Competition Board imposed administrative on Eti, Çiçek Sepeti, IGSAŞ and Unmaş due to deletion of digital conversations during on-site inspections (e-mail, WhatsApp messages). It is important to note that in the technology era, the Board is able to easily detect this kind of attempt.

11. As per the Personal Data Protection Law No. 6698, data controllers (i) who reside outside of Turkey or (ii) who have more than 50 employees or whose annual balance sheet is above TRY 25,000,000 is obliged to enroll in the Data Controllers’ Registry (tr. VERBIS) by December 31, 2021 at the latest.

12. Turkey has joined among the countries implementing the Madrid E-Filing System developed by WIPO. Through this system, international trademark registration applications may be completed much more practical and faster.

13. Procedures and principles regarding holding general assembly and board of directors’ meetings electronically have come into force.
14. Periods for notification of general assembly results and notification of change in residence and change in by-law is prolonged from 30 days to 45 days.
15. Limit on bookkeeping on the basis of balance sheet is increased from TRY 500,000 to TRY 1,500,000.
16. Procedures and principles regarding the notification for associations sending aid to abroad are determined.

i. The 9th Civil Chamber of Court of Cassation, File No: 2021/9606, Date: 2021/13089: Rendering a decision without taking into account the evidence and witness list submitted by one of the parties within due time considered as the restriction of the right to defense, which is a constitutional right.

ii. The Constitutional Court, File No: 2018/20182, Date: 14.09.2021: As per the decision, interferences to freedom of expression must not abolish freedom of expression or aggravate the exercise of freedom of expression, even if they have a legitimate aim. The field of freedom of expression should be broad in universities. Also, the field of interference to expressions and actions outside of educational institutions should be narrow. Finally, sharing the news on the social media account without comment, regardless of the accuracy of the news, can be considered within the scope of freedom of expression.

Please do not hesitate to contact us if you have any queries regarding the above matters.

Best Regards.

Selim DÜNDAR, Attorney-at-Law