03.01.2023/9
2023 Interest Rates for Rediscount and Advance Transactions Determined
Article 45 of the Central Bank of the Republic of Turkey Law No. 1211 states that “The Bank may accept for rediscount the commercial bills and documents to be issued by banks under the principles it determines, provided that they bear at least two signatures deemed credible.” In accordance with this article, the Central Bank accepts commercial bills and documents issued by banks for rediscount and meets their temporary liquidity needs. The Central Bank may also grant advances by accepting the notes it deems acceptable for rediscount as collateral.
From a tax law perspective, the concept of rediscount is used in the valuation of receivables and payables linked to promissory notes. Articles 281 and 285 of the Tax Procedure Law No. 213 (TPL) provide that receivables and payables linked to promissory notes that have not yet matured may be adjusted to their value as of the valuation date. According to these articles, rediscount is mandatory for banks and insurance companies, while it is optional for others. However, taxpayers who apply rediscount to their receivable notes are also required to apply it to their payable notes. In cases where the interest rate is not specified on the note, the official discount rates of the Central Bank must be applied for rediscount calculation.
According to Communiqué No. 238 of the TPL, which explains the procedures related to rediscount in detail, the interest rate determined by the Central Bank for advance transactions shall be applied in rediscount calculations, and the internal discount method shall be used. As per the Communiqué published in the Official Gazette dated 31/12/2023 and numbered 32060, the annual discount rate to be applied in rediscount transactions for notes with a maturity of up to 3 months has been set at 9.75%, and the annual interest rate for advance transactions has been determined as 10.75%.
Accordingly, taxpayers wishing to apply rediscount to their receivables and payables linked to promissory notes must use the internal discount method and apply the 10.75% interest rate determined for advance transactions if the interest rate is not specified on the note.
You can access the relevant Central Bank of the Republic of Turkey Communiqué here.
Kind regards,
BILGENER
