On November 30, 2024, a significant update affecting financial transactions in Turkey was published in the Official Gazette. The General Communiqué No. 575 introduced changes to the certification limits for collections and payments, increasing the threshold from 7,000 TRY to 30,000 TRY. This adjustment has implications for individuals and businesses operating within Turkey, particularly those who handle large sums of money in their financial transactions.
This article explores the details of the updated limits, the certification obligations, and the specific changes regarding transactions involving non-resident real persons.
Key Change: Certification Limit Increased to 30,000 TRY
The certification requirement under Turkish regulations mandates that certain financial transactions be documented using records issued by authorized financial institutions. Prior to this update, the threshold for this obligation was set at 7,000 TRY, meaning any collections or payments exceeding this amount had to be certified through banks, electronic payment institutions, or post offices.
With the publication of General Communiqué No. 575, this limit has now been raised to 30,000 TRY, effective immediately. Here’s what this means in practical terms:
- Any collection or payment exceeding 30,000 TRY must now be processed through intermediary financial institutions.
- These transactions must be documented using certificates, receipts, or other official documents issued by these financial entities.
- Payments below 30,000 TRY are not subject to this certification requirement, providing greater flexibility for smaller transactions.
Who Is Affected by This Regulation?
The regulation primarily applies to entities and individuals engaged in financial transactions that meet or exceed the new limit. This includes:
- Businesses operating within Turkey: Companies dealing with large transactions must ensure that payments and collections exceeding the 30,000 TRY threshold are conducted through intermediary institutions and properly documented.
- Individuals handling high-value transactions: Private persons involved in large financial dealings, such as property purchases or large-scale investments, are also subject to this requirement.
- Foreign traders and businesses: The changes also impact those conducting transactions with non-resident real persons, albeit with some notable updates (discussed below).
Failure to comply with these certification obligations may result in legal penalties, making it crucial for all stakeholders to understand and adhere to the revised rules.
Abolishment of Certain Obligations for Non-Resident Real Persons
One of the significant updates under General Communiqué No. 575 is the abolition of the obligation to deposit collected amounts in intermediary financial institutions for transactions involving non-resident real persons. Previously, amounts collected in such transactions had to be deposited into intermediary institutions no later than the end of the first business day following the collection.
What Has Changed?
- Previous Rule: Businesses or individuals making transactions with non-resident real persons were required to deposit the collected amounts into a financial institution by the next business day.
- New Rule: This obligation has been completely abolished, reducing administrative burdens for those involved in such international transactions.
This change streamlines the process for businesses and individuals engaging with foreign clients or partners, allowing them to handle collections more efficiently without the need for immediate deposits.
Passport Number Requirement Remains in Place
While certain obligations have been removed, the regulation maintains the requirement to record the passport numbers of non-resident real persons on invoices issued for related transactions. However, there is no longer a need to attach a copy of the passport to the invoice, simplifying compliance procedures.
Key Points to Remember:
- The passport number must be clearly written on all invoices issued for transactions involving non-resident real persons.
- Although no passport copy is required, businesses should still ensure accuracy when recording passport details to avoid discrepancies or potential disputes.
- This change reduces the documentation burden while still maintaining a necessary level of traceability in financial transactions.
Implications for Businesses and Individuals
1. Eased Compliance for Smaller Transactions
The increase in the certification limit to 30,000 TRY provides much-needed relief for businesses and individuals managing lower-value transactions. With fewer financial dealings subject to certification requirements, administrative workloads and associated costs are reduced.
2. Streamlined Processes for International Transactions
The abolition of the deposit obligation for collections from non-resident real persons simplifies cross-border dealings. Businesses engaging in international trade or providing services to foreign clients can now handle collections without the added step of immediate deposits.
3. Continued Importance of Documentation
While some requirements have been relaxed, the obligation to document transactions above 30,000 TRY remains a critical aspect of compliance. Businesses must ensure that all necessary records, including those issued by banks, electronic payment institutions, or post offices, are properly maintained.
4. Enhanced Clarity on Reporting Requirements
The retention of the passport number requirement ensures that transactions involving non-resident real persons remain transparent. This aligns with broader efforts to combat money laundering and enhance financial accountability within Turkey.
Practical Steps for Compliance
To ensure adherence to the updated regulations, businesses and individuals should consider the following steps:
- Review Financial Policies and Systems: Update internal policies to reflect the new 30,000 TRY certification limit. Ensure accounting systems can identify and document transactions exceeding this threshold.
- Engage with Financial Institutions: Build strong relationships with banks, electronic payment institutions, or post offices to facilitate smooth documentation processes for high-value transactions.
- Train Staff on New Requirements: Educate employees about the updated regulations, including the revised limits, documentation requirements, and the need to record passport numbers for certain transactions.
- Audit Current Practices: Conduct regular audits to identify potential gaps in compliance and rectify them promptly.
- Leverage Technology for Record-Keeping: Invest in financial management tools to automate documentation processes and reduce the risk of errors.
The publication of General Communiqué No. 575 marks a significant shift in Turkey’s financial regulations, particularly regarding the certification of collections and payments. By increasing the threshold to 30,000 TRY, the government aims to reduce administrative burdens on smaller transactions while maintaining robust oversight of higher-value dealings.
For businesses and individuals operating within Turkey, understanding and implementing these changes is essential to avoid legal penalties and streamline financial processes. With the additional easing of requirements for transactions involving non-resident real persons, these updates signal a move toward greater efficiency and clarity in Turkey’s financial landscape.
To access the official circular and gain deeper insights into these changes, you can find the document here (in Turkish).