Forex contracts n TRY should be real gned w th stamp tax
Another regulat on was added to the Protect on of the Value of the Turk sh Currency decree through Dec s on
No. 85 publ shed n the Off c al
Gazette on September 13, 2018. Then on September 17, the Treasury and F nance M n stry ssued a press release clar fy ng the deta ls about contracts that are perm tted and not perm tted to be executed n fore gn currency or ndexed to fore gn currency through the Commun que no.2018-32/51 dated 6 October publ shed n the Off c al Gazette. However, the current state of the regulat on may lead to var ous debates on the bas c pr nc ples of taxat on. Follow ng the ntroduct on of the requ rement for sett ng the contract value and other payment obl gat ons ar s ng from these contracts n Turk sh l ras, Turk sh res dents w ll have to amend the concern ng contracts through mod f cat ons, add t onal protocols and addenda n Turk sh l ras. The requ rement of chang ng the contracts ra ses the quest on of wh ch exchange rate w ll be used, whether any stamp tax w ll be appl ed or not. Art cle 14 of the Stamp Tax Law conta ns a prov s on that,
“In case of mod f cat on of contracts of a g ven amount, the amount of the ncrease shall be l able to duty at the same rate. As per the f rst clause, for the contracts subject to tax w th max mum amount, w thout any change n other prov s ons, th s term w ll not apply concern ng the ncreased value f the value r ses only. In case of transfer, the duty to be collected shall be one quarter of the duty on the or g nal contract.” W th n that context, add t onal stamp tax w ll have to be calculated over the ncreased cost. The taxpayer w ll have to subsequently undertake an unpred ctable stamp tax burden. The arrangement related to redef n ng the contracts concluded n fore gn currency n Turk sh l ras s ma nly a non-tax regulat on target ng the negat ve developments and frag l ty n the economy. In add t on, as long as the Stamp Tax Law and attached tables are not amended, t has a potent al to create add t onal tax and workload regard ng the contracts executed prev ously.