Subject: Recent Developments Regarding the Foreign Exchange Transactions.
New regulations concerning foreign exchange transactions are summarized below.
1) BITT rates to be imposed on foreign exchange transactions has been amended.
Banking and Insurance Transactions Tax ("BITT") rates to be imposed on foreign exchange transactions has been amended through the Presidential Decree no. 1106 published in the Official Gazette dated May 15th, 2019.
As is known, with the cabinet decree No. 2008/13459 published on 15.04.2008, BITT to be calculated over the sales amount in case of foreign exchange transactions had been determined to be zero effective from 1.5.2008.
Pursuant to the relevant Presidential Decree, BITT to be calculated over the sales amount in case of foreign Exchange transactions is determined to be one per thousand (0.1%), effective as of May 15, 2019. In other words, foreign exchange sales performed by banks, insurance companies, and foreign Exchange offices will be subject to BITT at 0.1%.
Additionally, in accordance with the relevant regulation, BITT rates to be calculated over the below listed transactions are determined to be 0%;
Foreign currency sales among banks, authorized institutions or between banks and authorized institutions,
Foreign currency sales made to the Turkish Ministry of Treasury and Finance,
Foreign currency sales made to borrowers who have foreign currency loan, by the lender bank or the bank that mediate the use of foreign currency credits, intended for the payment of the foreign currency loan.
2) Turkey's Banking Regulation and Supervision Agency ("BRSA") announced a new decision in relation to imposing of settlement delay on FX purchases more than USD 100,000.
According to the BRSA decision dated May 21, 2019 FX purchase transactions amounting to USD 100.000 and exceeding amounts (or equivalent amounts in other currencies) by individuals (real persons) will be performed with a one-working day settlement delay. Accordingly, the FX purchases will be transferred to the individuals’ accounts with one working day delay.
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