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Decree No. 85 Amending Decree No. 32 about the Conversion of Foreign Exchange Contracts

Decree No. 85 Amending Decree No. 32 about the Conversion of Foreign Exchange Contracts

In the event that the parties fail to agree, the exchange rate in the contracts concluded before 2 January 2018 will be based on the effective selling rate of the Central Bank on 2 January. If the parties agree, they will be able to switch to TL through different prices. New designated rates will be updated every year according to the consumer price index (CPI) Turkey Statistical Institute (TUIK).

 In the four-page communiqué draft, contracts that shall be compulsorily concluded with TL and contracts within the scope of exemptions were organized under 23 headings. The rules to be applied in the old and new contracts are as follows according to their object:

  • Housing and workplace sales and rentals: Residents in Turkey; they will not be able to conclude real estate sales or lease agreements, including residential and roofed workplaces with contract price in foreign currency or indexed to foreign currency

  • Employment contracts: Residents in Turkey; they will not be able to conclude employment contracts other than those to be executed abroad, indexed in foreign currency or in foreign currency.

  • Service contracts: residents in Turkey cannot sign a service agreement including consultancy or mediation agreements between them with foreign currency or indexed to foreign currency. The exceptions to this obligation are as follows:

 –  A person not having Turkish Citizenship being party to these service contracts,

                   – Service contracts for export, transit trade, export sales and deliveries and foreign exchange earning services and activities,

                  –   Service contracts within the scope of the activities to be carried out abroad by residents in Turkey.

  • Construction (work) contract: Residents in Turkey; except for the construction of ships, cannot sign between them a contract for work with foreign currency.

  • Movable sales contracts: Residents in Turkey; will be able to make contracts with foreign currency for sales and leasing contracts of movables excluding vehicle sales contracts and construction equipment.

  • Leasing contracts: Financial lease and leasing contracts related to ships can be made with foreign currency. Financial leasing contracts can be determined in terms of exchange rates.

  • Non- Turkish Citizens and Residents in Turkey: Persons who don’t have the citizenship of the Republic of Turkey, and parties to employment contracts, the contract value and other payment obligations arising from this contract can be designated as foreign currency indexed.

  • Public institutions: Public institutions and organizations and the companies that have direct or indirect shareholding in the defense industry sector of these institutions and companies will be able to make contracts with foreign currency other than real estate sales and leasing. 

  • Foreign company branches: Branches, representative offices, liaison offices in Turkey belonging to entities registered abroad and companies with fifty percent and over foreign shareholders in Turkey and companies in the free zones of business can conclude service contracts with foreign exchange currency.

  • Airlines: domestic airline and the company resident in Turkey for technical maintenance services, can conclude contracts with foreign currency excluding for real estate sales and lease contracts.

  • Check and notes: Within the scope of the contracts that are not subject to foreign exchange, the prices in the negotiable documents such as check and promissory note will not be indexed to foreign exchange or foreign currency.

  • Indexing to precious metals: Contracts indexed to precious metals and / or commodities whose prices in international markets are determined in foreign currency will be considered as a foreign exchange indexed contract. 

  • Branches abroad: The branches, representation offices, offices, liaison offices, funds which are operated and managed by the persons residing in Turkey will be considered as stationary in Turkey.

  • Former car rental contracts: Car rental contracts, including the construction machinery previously signed, will continue.


If the parties fail to agree within 30 days from the publication of the Decision, the exchange rate on 2 January shall prevail: If it is not possible to reach an agreement between the parties in the contracts to be converted into TL, the prices will be converted into Turkish Lira by using the Central Bank effective sales rate (3.7776 TL) for the contracts signed before the 2 January 2018. For the contracts signed after 2 January the exchange rate of the date of the contract will be applied.

These amounts will be applied until the renewal period of the contract. The amount which will be determined during the renewal period may not exceed the amount calculated based on the consumer price index determined for each month by Turkey Statistical Institute (CPI) monthly rates of change.


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