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: 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.) 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, 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.

Read more

The Analysis Of The Communiqué On The Limits Of The Foreign Exchange Prohibition In Terms Of Employment Contracts


On 13.09.2018, with the Presidential Decree no. 85, some provisions were added to the ‘’Decree No. 32 on the Protection of the Value of Turkish Currency’’ and accordingly ‘’the prohibition of the determination of contract price or other contractual obligations in foreign currency or foreign currency indexed, in some type of contracts between Turkish Residents’’(‘’The Foreign Currency Prohibition’’) has been regulated. Thereafter, “The Communiqué on the Resolution No. 32 on the Protection of the Value of Turkish Currency’’ (the “Communiqué’’) prepared by the Ministry of Treasury and Finance has been published in the Official Gazette on 06.10.2018. With the Communiqué; there are some exceptions to this restriction on the determination of foreign currency or foreign currency indexed price. These exceptions are based on the sub-types, the parties and execution place of the contractual obligations of the contracts listed in the Decision regulating The Foreign Currency Prohibition. In this text, the Communiqué is analyzed in regard to Employment Contracts. With the Communiqué, the following Employment Contracts are stated within the scope of Foreign Currency Prohibition: The Employment Contracts signed by and between public institutions and organizations and third party institutions The Employment Contracts signed by and between Turkish residents and Commercial airline companies operating in passenger, freight or mail transportation; Companies providing technical maintenance services for air transport vehicles, engines and parts thereof; Operating license to perform ground handling services at airports within the scope of the civil aviation legislation, the field or the authorized public or private legal entities with business founded by concerned organizations and institutions in the status and companies directly or indirectly capital of at least 50% of the partnership owned shares ratio However, The Employment Contracts that are performed abroad; or The Employment Contracts where the employee is not a Turkish citizen; The Employment Contracts that are signed by non-Turkish residents’ Turkish branches, representative offices, liaison offices; Turkish companies in which a non-resident person directly or indirectly holds 50% or more of the share capital; and free zone companies, only for their activities in the free zone has been excluded. In the same Communiqué, there are some provisions that determine the scope and limits of the aforementioned Foreign Exchange Prohibition in terms of the settlement date, price type and date of the contract; and there are some regulations on the exchange rate and increase rates that should be taken into account in the calculation of the re-value. In the Communiqué, there are examinations related to residential requirement in Turkey. According to these examinations; In terms of associations and extensions on abroad, belonging Residents in Turkey: Branches, agencies, offices, liaison offices, operated or managed funds, Companies with over fifty percent of shareholdings; and Companies with direct or indirect ownership are within the scope of the prohibition and they are determined as resident in Turkey. Concerning the Price: The prices included in the negotiable instruments to be regulated within the scope of contracts that cannot be determined in terms of foreign currency or foreign currency indexed within the scope of the prohibition. Contracts indexed to the precious metals and/or commodities whose price is determined in foreign currency in […]

Read more

Simplification of Procedures for Acquirement of Turkish Citizenship


With the “Regulation on the Amendment of the Regulation on the Implementation of the Turkish Citizenship Law” (“Amendment Regulation”),published in the Official Gazette on 18.09.2018, a number of regulations have been introduced and the relevant procedures have been facilitated for foreigners to acquire Turkish citizenship. In accordance with the Amendment Regulation, there have been some alterations to the Regulation on the Implementation of the Turkish Citizenship Law (“Implementing Regulation”) Article 20, entitled “Acquisition of Turkish citizenship, necessary documents and procedures”. According to the amended provision, the amount of capital investment required to acquire Turkish citizenship has been reduced and the number of people who need to be employed has been reduced. Briefly speaking, the exceptional acquisition of Turkish citizenship is regulated in Article 12 of the Turkish Citizenship Law and concerns the status of citizenship for persons who do not have the right to acquire Turkish Citizenship on the basis of birth or paternity principle. According to the related article; Persons who: establish industrial facilities in Turkey; have provided or are thought to provide an extraordinary service in scientific, technological, economic, social, sportive, cultural or artistic fields; on the condition that the competent Ministry has put forward a justified offer for them; despite not working in Turkey, will invest in accordance with the rules (scope and amount) which will be determined by the President; or persons who have received resident permits as their foreign spouse, the minor or dependent foreign child; Turkuaz Card holders and their foreign spouse, the minor or dependent foreign child; are considered mandatory to be accepted to citizenship; are considered as immigrants may acquire Turkish citizenship by the decision of the Council of Ministers (President’s decision, according the Amendment Regulation) provided that they do not face an obstacle in terms of national security and public order. The conditions required for foreigners to apply in order to acquire Turkish citizenship are regulated In Article 20 of the Implementing Regulation, and some capital conditions are required to be provided and proved. With the Amendment Regulation dated 18.09.2018, which was issued to amend this article of the Implementing Regulation, the previously determined capital amounts were reduced. To sum up the conditions that make it possible to benefit from the exception and the amendments that are brought to these conditions with the Amendment Regulation, we may emphasize that: Previously, the Ministry’s proposal and the decision of the Council of Ministers for the acquisition of citizenship within the scope of the exemption would be required; with the amendment, the Turkish citizenship may be granted, under the same exception, citizenship shall be granted with the decision of the President. One of the conditions for the acquisition of Turkish citizenship under the exception is to have a certain amount of fixed capital investment. In accordance with the Amendment Regulation, minimum fixed capital investment amount of $2.000.000 has been reduced to $500.000 and The Ministry of Industry and Technology has been appointed to replace the Ministry of Economy as the competent authority who will determine the abovementioned amount. Another exception for the acquisition of Turkish citizenship is the purchase of an entailed real estate. […]

Read more

Illegalization of Foreign Currency As a Way of Protection of the Turkish Currency Value


The Decision 85 of President (‘’Decision’’) is published by Presidency of Republic of Turkey on the date of 13.09.2018 for the purpose of protection of the Turkish currency’s value. As a result, setting the contract value in foreign currency or indexed to foreign currency has been rendered against the law. The Decision is applicable for some specific type of of contracts and it only applies where both parties are residents in Turkey. According to the Decision, the Ministry of Treasury and Finance has the authority to make exceptions to this rule. With regard to the current contracts that contain prices in foreign currency or indexed to foreign currency, the contracting parties have to amend the price and agree on a new value set with the Turkish Lira. The Decision comprises: Contracts of bargain or sale for chattels or real estates, Leases of chattels or real estates without any exception for car rental and financial leasing, Contracts of leasing, Labor contracts, Service contracts and Contracts ofconstruction In the decision, there is only one criteria related to the contracting parties; the Decision is applicable only if the parties are residents in Turkey. According to the Turkish Civil Code, a real person’s residenceis the place in which he/she is settled in with the intention to stay permanently. A legal person’s (entities)residence is the place from where the business is managed (e.g. head office), if there is no other provision in the company’s certificate of incorporation. Concerning the price, there is no mention of a specific currency (USD, Euro, etc.) and the ban is applicable for all types of foreign currency and all values that are indexed to any foreign currency. Besides, contract values (e.g. service prices, leasing prices, commitment prices) and the other payment obligations arising from the contracts (e.g. conventional penalties, security prices, deposits) are under the scope of this ban. As a result of this decision, the future contracts that are under the scope of the decision and the relevant contracts which are signed before the effective date of the Decision have to be determined or revalued in Turkish Lira within 30 days from the effective date of the Decision. On the other hand, regarding the due debts -set in foreign currencies- which arise from the abovementioned type of contracts; it is generally accepted that the value can not be changed to Turkish Lira if such due debt has become a matter of dispute. In cases where the due debt is not disputed, such amendment shall be made in accordance with the Decision. In the Decision, there is not any criteria related to the revaluation of prices for the previously signed or any specified exchange rate for denomination to Turkish liras. The parties are required to determine a new price in Turkish Lira with their free wills, as a conclusion of the negotiations. Furthermore, there is no regulation regarding the consequence of a fruitless negotiation. (i.e. the case where the parties fail to come to an understanding with regard to revaluation) However, it is common opinion that in such cases, the Parties can request the determination of a new price by […]

Read more

An Obligation Originating From a Right: Usage of Trademark


On one hand, a registered trademark vests its proprietor broad authorities and exclusive rights; on the other hand it imposes some obligations to its proprietor. The most important of these obligations is the usage of the trademarkand it is foreseen in the Turkish Industrial Property Code. (‘’IPC’’) Conditions of trademark usage and situations that may be considered as usage of trademark are specified in IPC Art.9. Cancellation of a trademark due to the breach of usage obligation, is regulated in IPC Art.26. According to these articles, “Proprietor’s non-use of a trademark in Turkey staidly for five years from principal register date or recessing usage of trademark for five years continuously”are valid reasons for the cancellation of a trademark. The term “non-use of a trademark”means using a trademark beyond the scope of IPC Art.9 or in defiance of IPC Art.9. In accordance with the abovementioned article, these are the conditions for a trademark to be evaluated as a used-trademark: Usage of a trademark by its Proprietor Usage of a trademark in regard to goods and services for which the trademark is registered Not recessing the usage of a trademark for more than five years without any valid reason Using a trademark in Turkey Using a trademark staidly and severely Under the scope of IPC, there is no necessity for setting a trademark over goods tangibly in order for usage of a trademark. For instance, using a trademark for invoices related to goods and services which the trademark registered for, or using a trademark for publicity via media is enough for a trademark to be considered as used. Howevere, it is crucial to state that the usage of a trademark for only a part of the registered classes or groups of goods and services does not infer that usage of trademark obligation is fulfilled for all the registered classes and groups. Exceptional situations which are accepted as usage of a trademark, under the scope of IPC Art.9, 2nd para. , are as follows: Usage of a trademark with different factors or elements without any transformation of its distinctive character Usage of a trademark on products and packages just for exportation Usage of a trademark by 3th persons who are authorized by Proprietor ‘’Usage of a trademark with different factors or elements without any transformation of its distinctive character’’means usage of a trademark in different colors, shapes and dimensions or usage with insignificant additions or reductions. In that case, using a trademark by adding or reducing different factors is possible according to IPC Art.9 para. 2-a on condition that the distinctive character of the signs of the trademark is preserved and that the alteration does not cause a confusion in a way that the consumers may think there is a different trademark at hand. Although using a trademark in Turkey is a necessity for usage of trademark obligation, according to IPC Art.9 para. 2-b, using a trademark just for exportationis denoting “usage of trademark” in case of using trademark on products and packages. In such case, there is no obligation for releasing the products to the domestic market, however the trademark have to be […]

Read more

Employee Invention Fee


At the present time, it is a known fact that people who deliver solutions about problems in the technical area are usually employed in R&D departments. According to Turkish Industrial Property Code (“IPC”), technical inventions which are made by these people, are bifurcated as: Free inventions Service inventions Pursuant to IPC Art.113, Service inventions are the inventions made by an employee as a part of her/his work at a firm or public administration or the inventions made by an employee during the employment relation, based on experience and operations of a firm or public administration. According to the second paragraph of the same article, every other invention except the service invention is accepted as free inventions. Judicially, when an employee makes any service invention, she/he is liable for making written notification to the employer without any delay.  After that notification, the employer is able to claim full or partial ownership of that service invention. In the case that the employer claims ownership, the employee may demand a fair amount of fee. In general;  the economic assessment of the invention, the position of the employee and the contribution rate of firm/public administration relative to making invention are taken into account during the evaluation of the fee. Moreover, the fee which is paid for the invention to the employee working at public administration, is determined by IPC Art. 113, para 5, indicated as ”the fee has to be more than one-third of the incomes acquired from the invention. However, if the invention is used by the public administration’s itself, the fee cannot be more than ten times the monthly net fee of the employee. ” On the other hand, there is no legislation about the invention fees for the other employees, except IPC Art.113; and in IPC, it is said that fee tariff regarding employee inventions and arbitration process will be drawn up by regulations. Therefore, in 29th of September 2017, “Regulation In Respect of Employee Inventions, Inventions Made In Higher Education Institutions and Inventions Occurred In Administratively Supported Projects” (“Regulation”) enters in force. In this Regulation,  Article 10 and the rest are related to the determination of invention fees. Like as IPC, according to that Regulation, Economical value of service invention Assigned position of the employee Contribution rate of firm/public administration relative to making invention are taken into consideration while determining fee amounts. Moreover, some formulas, ratios and coefficients regarding invention fee tariff are prescribed in the Regulation. Therefore, in case of full ownership claim by the employer and fee demand by the employee,  a one-off encouragement award and a separate fee evaluated according to formulas in the Regulation would be paid by the employer to the employee. Besides, in case of partial ownership claimby the employer, a fee would be paid to the employee in exchange for the usage of  invention by the employer. Furthermore, demanding a fee in exchange for the ownership of invention right of the employee is reserved each time. At the time employee request a fee in exchange for his/her invention, it is eligible to assure payment by writing a receipt, for providing a basis to employee’s assignment […]

Read more