01.06.2022/38
31.03.2022 Regarding the Exemption to be Applied for the Conversion of Foreign Currency in the Balance Sheets as of 31.03.2022 to Currency Protected Deposit Accounts
With the Law No. 7407 on the Amendment of the Banking Law and Certain Laws and Decree Law No. 655 published in the Official Gazette dated 28.05.2022 and numbered 31849, the following paragraphs were added to the Provisional Article 14 of the Corporate Tax Law No. 5520.
“(4) In the event that the institutions convert their foreign currencies included in their balance sheets dated 31/3/2022 into Turkish lira at the conversion rate within the scope of supporting the conversion to Turkish lira deposit and participation accounts until the end of 2022 and use the Turkish lira assets obtained in this way in Turkish lira deposit and participation accounts with a maturity of at least three months, the interest and dividends and other earnings obtained at maturity, including those arising from the end-of-period valuation of the said accounts, are exempt from corporate tax. The President is authorized to apply the exemption in terms of foreign currencies included in the balance sheets dated 30/6/2022 and/or 30/9/2022.
(5) The exemptions under this article shall also apply to the accounts renewed at maturity until the end of 2022.”
With the new regulation,
- In the event that the corporations convert their foreign currencies in their balance sheets dated 31.03.2022 into Turkish Lira until the end of 2022, corporate tax exemption will be applied for interest, dividends and other gains to be accrued for deposits.
- However, this exemption will not apply to foreign exchange gains that may arise from the transformation.
- The President of the Republic is authorized to apply this exemption for foreign currencies included in the balance sheets dated 30.06.2022 and/or 30.09.2022.
Law No. 7407 is available here.
You can also access our circular, which provides detailed information on the exemption for the gains from the conversion of Turkish Lira deposits, here.
Sincerely,
BİLGENER
