The Quarterly is prepared every quarter in order to point out significant legislative amendments under Turkish law and developments in case-law.
I. LABOUR LAWThe minimum wage has been increased to Net TRY 5.500 from Net TRY 4.250 for the second half of 2022.
II. BANKING AND FINANCE LAW Banking Regulation and Supervision Agency (“BDDK”) has announced a new rule for commercial cash loans to protect the value of Turkish Lira. According to the new rule, companies (exc. banks and financial institutions) are not allowed to take out commercial cash loans in Turkish Lira in case:
i. They are subject to independent audit, and
ii. Have FX cash assets above TRY 15million, and
iii. Their FX cash assets are greater than 10% of total assets or net sales revenue of the last year.
Shortly after the feedbacks from the sector players, BDDK published a press release to clarify the new rules. Accordingly, the following rules shall apply to the companies that meet the abovementioned criteria:
i. If such companies are permitted to take out FX loans as per the relevant regulations, then although such companies cannot take out commercial cash loans in Turkish Lira, they can still continue using FX loans.
ii. If the relevant regulations prevent such companies from taking out FX loans, then, in order to take out commercial cash loans in Turkish Lira, they should prove with an independent auditor’s report that their 3-months of FX net position is below zero. However, the commercial cash loans that the companies can take out in Turkish Lira is limited to the FX net position.
iii. Companies subject to FX loan prohibition that cannot present its negative FX net position as described above, cannot take out loans in FX or Turkish Lira.
It is reported that 58 publicly traded companies would be subject to the restriction above. It is also reported that some banks started to request independent audit reports from all of its corporate customers. BDDK further announced that no additional information/documents should be requested from customers in order to ensure that economic activities continue as usual.
III. TAX LAW Another step to protect the value of Turkish Lira is a new corporate tax exemption introduced for incomes gained through Foreign Exchange-Protected Turkish Lira Deposit Accounts.
According to the exemption; provided that foreign currencies recorded in the balance sheet dated March 31, 2022 (i) are converted into TRY until the end of 2022 and (ii) relevant TRY assets are deposited in the Foreign Exchange-Protected Turkish Lira Deposit Account for at least 3 (three) months, the interests, and other incomes shall be exempted from corporate tax.
IV. AVIATION LAW A series of amendments have been made in the Regulation on Ground Handling Services (SHY-22) on June 14, 2022. The most significant amendment is that ground handling organizations are required to appoint a responsible manager, having full responsibility towards the Directorate General of Civil Aviation (“SHGM”) and necessary organizational and financial authority.
SHGM published Business Flight Circular (HUD 2022/1) effective from June 15, 2022to ensure that business flights with aircrafts registered in a foreign state within Türkiye are carried out in accordance with the air cabotage rule (Commercial passenger, mail and cargo transportation within Türkiye can only be made by Turkish aircrafts). The operators of such flights should fill out a form in which its captain pilot confirms the compliance with the cabotage rule, and submit it to the ground handling company before the flight. The operator or the owner of the aircraft and the ground handling company would be jointly responsible for the completion of the form.
V. LEASE CONTRACTS A new temporary legislation strictly limiting rental fee increase rate for houses is adopted. As per the rule, the rate of increase cannot exceed 25% for one year starting from June, 2022.
This limitation will affect the lease market significantly. Until 2019, the rate of increase was limited to PPI (which is currently 132%) but then, the limit was changed to 12 months moving CPI averages (which is currently 39,33%). Now the new limit is 25% as the below chart:
Notaries are authorized to conclude real estate sales contracts effective from the beginning of 2023. Prior to this new law, real estate sales and transfers were at the sole authority of the land registries. The new rule aims to make real estate transactions easier. The details of this new authority will be regulated by the Ministry of Justice.
VII. ACQUIRING TURKISH CITIZENSHIP The minimum investment limit for acquiring Turkish citizenship through purchasing real estate has been increased from USD 250.000 to USD 400.000.
Moreover, depositing at least USD 500.000 into the private pension system has been introduced as a new method to acquire Turkish citizenship.
VIII. PERSONEL DATA PROTECTION LAW The Personal Data Protection Board (“KVKK”) has published its “Guidelines on Cookies” and explained the key issues to be considered by data controllers while using cookies.
KVKK has issued a warning for the data controllers who have not registered with the Data Controllers’ Registry (“VERBIS”), underlying the administrative fines to be applied approx. from USD 3.000 to USD 160.000 in case of non-compliance. As per the law, data controllers residing outside of Türkiye or who have more than 50 employees or whose annual balance sheet is above TRY 25 million is obliged to enroll in VERBIS.
IX. COMPETITION LAW The Turkish Competition Board initiated an investigation against Trendyol, alleging that it was privileging its platform providing intermediation for online sale of second-hand goods, “DOLAP”, by sharing consumer data and preventing the transfer of this data to the competing platforms.
X. ADMINISTRATIVE LAW The Council of State General Assembly has ruled that term of litigation against the administrative acts subject to special or general term of litigation but do not specify the applicable term of litigation shall be subject to general term of litigation. For example, the term of litigation against the administrative fines under the Environment Law is normally 30 days. If the public authorities do not indicate the term of litigation in an order of administrative fine due to an alleged breach of the Environment Law, the addressee of the order can initiate an administrative lawsuit against the order within 60 days, i.e. during the general term of litigation.
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