Decision on the use of foreign currency loans by residents who do not have foreign currency income in Turkey

According to the decision on the use of foreign currency loans by residents who do not have foreign currency income in Turkey, persons who do not have foreign currency income will not be able to use foreign currency loans from abroad or within the country as of 02/05/2018. Here, what is implied with foreign currency income is expressed as follows:

“Revenues from export, transit trade, export sales and deliveries determined by the relevant legislation, and foreign exchange earning services and activities”. However, foreign exchange income condition will not be sought in cases listed in the decision and in the following cases, what stands out from this condition is that the restriction does not include the foreign exchange credits to be used by residents in Turkey, whose credit balance is 15 million USD or more on the date of use. Here, what is meant by the term credit balance is expressed as follows:

“The sum of foreign currency loans which are obtained from within the country or abroad, that have not been repaid,” Circumstances in which foreign currency income condition will not be required:

• Foreign currency credits to be used by residents of Turkey, whose credit balance is 15 million US dollars or over on the date of use.

• Foreign currency credits to be used by residents in Turkey under the investment incentive certificate, and foreign currency credits to be used for the financing of machinery and equipment (excluding used ones and parts and accessories) in customs tariff statistical positions enumerated in Annex (I) in the 17th line of the Decision on the Determination of VAT Rates to be Applied to Goods and Services.

• Foreign currency credits to be used by those who have been awarded the tender, which has been declared internationally, in relation to the activities related to domestic tenders, or those who have undertaken defense projects approved by the Under secretariat of Defense Industry in Turkey.

• Residents of Turkey who do not have foreign currency income in the last three fiscal years, and foreign currency credits they will use, provided it is certified that does not exceed the total of possible foreign currency incomes they have certified, export, transit trade, export of sales and deliveries and foreign currency generating services and activities related to the connections and possible foreign currency income.

• Foreign currency credits to be used by residents in Turkey within the principles to be determined by the Ministry.