“Zero BITT Rate for Conversion to Turkish Lira”
According to Article 33 of the Expense Tax Law No. 6802, BITT is applied at the rate of two per thousand on the sales amount in foreign exchange transactions. The President of the Republic is authorized to reduce the tax rate specified in the article to zero and increase it tenfold for foreign exchange transactions
Pursuant to the authorization in the aforementioned article, the Presidential Decree No. 5349 was published in the Official Gazette dated 23/3/2022 and numbered 31787 regarding the application of BITT at a rate of 0 (zero) percent on foreign exchange sales made by the relevant bank to account holders by using the account balance at the end of maturity of Turkish lira accounts opened within the scope of supporting the conversion to Turkish lira deposits and participation accounts.
With the Presidential Decree No. 5349, the following sub-paragraph has been added to sub-paragraph e of the first paragraph of Article 1 of the Council of Ministers Decree No. 98/11591 dated 28.8.1998, in which the BITT rates are determined:
“Foreign exchange sales made by the relevant bank to the account holders by using the account balance at the maturity date of the Turkish lira accounts opened within the scope of supporting the conversion to Turkish lira deposit and participation accounts pursuant to the provision of subparagraph (g) of paragraph (I) of the third paragraph of Article 4 of the Central Bank of the Republic of Turkey Law No. 1211 dated 14/1/1970.”
Accordingly, BITT will not be applied to foreign exchange sales made by banks at maturity on TL conversion accounts. BITT will be applied on foreign exchange sales made before maturity.
The relevant Decision is available here.
Sincerely,
BİLGENER
