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Also, the previous Communique was containing an Also, the wording as labour and service contracts in which
arrangement indicating that any requirement for converting the institutions provided above are party to has been
vehicle leasing contracts in foreign currency executed amended as labour and service contracts as the party in
prior to 13 September into TL does not exist. “Commercial status of employer or service receiver.
vehicles with the purpose of passenger transport sale
contracts” has been added to this section with the new Public tenders
Communique.
Pursuant to the previous Communique, provided that they
Labour contracts are within the context of the execution of tenders, contracts
and international agreements in foreign currency or indexed
The labour contracts to be executed by and between Turkish to foreign currency in which the public institutions and
residents were not permitted to be set in foreign currency organisations are party to; contracts to be concluded by
or indexed to foreign currency either. The exemption for contractors with third parties were permitted to be arranged
that had been defined in the Communique as the contracts in foreign currency or indexed to foreign currency.
concerning the services to be executed abroad. Any
amendment for this provision does not exist, however the Through the new Communique, excluding the contractors,
contracts in which shipmen are party to have also been the contracts that will be concluded between the attendant
included into the scope of the exemption through the companies and the contracting third parties have also been
Communique. included into the scope of contracts that are permitted to be
set in foreign currency or indexed to foreign currency.
Service contracts
Trouble resolved, however…
Within the first Communique, it was indicated that the
service contracts concerning electronical communication The previous Communique was containing an arrangement
to be executed by and between Turkish residents starting in requiring the contracts to be redefined as TL in the
Turkey and ending abroad and starting abroad and ending in circumstance that one of the parties that does not exist
Turkey are permitted to be set in foreign currency or indexed within the scope of requirement of setting contracts in
to foreign currency. Turkish currency demands the upcoming contract to be
in TL or demands the conversion of existing contracts in
Through the latest Communique, service contracts starting foreign currency or indexed to foreign currency into TL. This
abroad and ending abroad have also been included into this provision does not exist within the latest Communique.
regulation. Also, the wording has been changed by the latest
Communique as “service contracts” while only “the service Stamp tax clarified
contracts concerning electronical communication” were
within the scope in the previous implementation. The Revenue Administration has released a stamp tax
circular on 22 November. Through that circular it was
Work contracts indicated that additional stamp tax shall not be sought for
the documents related to the conversion of contracts into TL
The requirement of setting work contracts to be executed by if the conditions indicated below are met:
and between Turkish residents in TL was introduced through
the previous Communique. However, the contracts for 1. If only the value is redefined, without making any changes
construction, repairing and maintenance of ships defined in on the other articles of the contracts (party, period
Turkish International Ship Registry Law were permitted to be extension, addition of new business etc.),
concluded in foreign currency or indexed to foreign currency.
Through the new Communique, it can be seen that a 2. If the total amount to be set in TL does not exceed the
provision indicating that the value within the work contracts amount to be reached by multiplying the value in foreign
containing cost in foreign currency may be set in foreign currency existing on the initial contract and the current
currency or indexed to foreign currency has been added. foreign exchange selling rate announced by the Central
Bank of the Republic of Turkey (CBRT) at the date on which
Companies with foreign partnership the document concerning the change was drafted,

The labour and service contracts concluded by branches, 3. If there is a reference to the initial contract.
representatives, offices, liaison offices, companies owned
by non-residents (shareholding rate must be at least 50% or
over) in Turkey and companies in free zones that are party
for their activities in free zones were permitted to be set in This article has been published in the Ekonomist magazine’s
foreign currency or indexed to foreign currency. issue 2018/47. dated 25.11.2018.

Through the latest Communique, companies directly or
indirectly or jointly controlled and/or controlled of
non-residents have been included into this provision and the
scope is extended.

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