Stamp Duty in the Contracts Regarding the Price Changes in Accordance With the Foreign Exchange Ban in Turkey

The Decision 85 of President (‘’Decision’’) is published by Presidency of Republic of Turkey on the date of 13.09.2018, in respect of the exchange of the contract prices agreed in foreign currency to Turkish Lira.

As a rule, contracts containing a certain amount of money are subject to relative stamp duty unless the exception is stipulated in the Stamp Tax Law or special laws. In this framework, in 22.11.2018, a special Circular was issued by the Revenue Administration regarding the stamp duty application on the papers issued within the scope of the relevant Decree.

According to the relevant Circular; "If The Papers issued for the re-determination of the foreign currency price of the contracts in TL currency under the scope of President's Resolution No. 85 carry all of the following terms, the stamp duty ("Paper") will not be required:

  1. Arrangements have to address only the price without making any changes in the other articles of the contracts (party, extension of time, addition of new business etc.)
  2. The total amount of contract prices; which is determined in the Turkish lira after amendments, must not exceed the amount of price that is calculated by multiplication of the price determined in foreign currency in the first contract and exchange selling rate proclaimed Republic of Turkey Central Bank on the date of the preparation of the Paper regarding re-determination of the price in TL,
  3. There has to be a reference to the first contract”

On the other hand, in accordance with the Circular; even if arrangements have not been made to other sections of the first contract, The Paper must be subject to stamp duty on increasing amount; if the amount of TL currrency version of the old contract’s price, according to the exchange selling rates Central Bank of the Republic of Turkey on the date of re-determination, coincided with less cost than new regulated price on the Paper; and if the tax rising from the first contract was not paid from the maximum amount.

Also; If the stamp duty rising from the first contract was paid from the maximum amount, the stamp tax shall not be required from The Paper due to the increased cost, provided that the paper has the above mentioned qualities.