02.11.2023/88
Interest Rates for Advance and Rediscount Transactions Redetermined
Article 45 of the Law No. 1211 on the Central Bank of the Republic of Turkey stipulates that “The Bank may accept for rediscount commercial bills and documents to be issued by banks within the principles to be determined by the Bank, provided that they bear at least two signatures that the Bank considers to be valid.” Pursuant to this article, the Central Bank accepts commercial bills and certificates issued by banks for rediscount and meets the temporary liquidity needs of banks. The Central Bank can also make advances by taking the bills accepted for rediscount as collateral.
In terms of tax law, the concept of rediscount is used in relation to the valuation of receivables and payables subject to promissory notes. Articles 281 and 285 of the Tax Procedure Law No. 213 (TPL) stipulate that receivables and payables linked to promissory notes that are not due may be rediscounted to the value of the valuation day. According to the aforementioned articles, rediscounting is mandatory for banks and insurance companies and optional for others. However, taxpayers who rediscount their notes receivable must also rediscount their notes payable. In the rediscount calculation, in cases where the interest rate is not specified on the bill
The official discount rates of the Central Bank should be applied. According to the TPL General Communiqué No. 238, where the procedures regarding the rediscount transaction are explained in detail, the interest rate determined by the Central Bank for advance transactions will be applied in the rediscount calculation and the internal discount method will be used.
With the Communiqué published in the Official Gazette dated 01.11.2023 and numbered 32356, the discount interest rate to be applied in rediscount transactions to be made against bills with a maximum of 3 months to maturity was determined as 35.75 percent per annum and the interest rate to be applied in advance transactions as 36.75 percent per annum.
Accordingly, taxpayers who wish to rediscount their receivables and payables subject to promissory notes are required to apply the 36.75 percent interest rate determined for advance transactions with the internal discount method, unless the interest rate is specified on the promissory note.
The relevant Central Bank of the Republic of Turkey Press release is available here.
Sincerely,
BİLGENER
