COVID 19 - Turkey passes economic measures to help business owners

Turkey

Correct as of 16:00, 16 April 2020. This article is not being maintained.

The Turkish government is continuously taking measures to minimize the impacts of the coronavirus (COVID-19) outbreak on the economy and ease the financial burden of citizens. As indicated in our law-now article on the Economic Stability Shield Program, ass announced on March 18, 2020, the government had already taken some economic measures to ease the damage of the pandemic. These, briefly, were:

  • Postponement of VAT payments, withholding tax returns and social security premium returns for April, May and June for six (6) months for certain sectors including retail, mall management, iron-steel, automotive, logistics-transportation, cinema, theatre, accommodation, food and beverages, textile and event organisation;
  • Postponement of usufruct rights (irtifak hakkı) payments and revenue share payments for hotel rents for April, May and June for six months;
  • Postponement of accommodation taxes until November 2020;
  • Postponement of credit and interest payments to banks by borrowers facing cash-flow disruptions due to the pandemic for three months; and
  • Increase in the duration of reparation work (telafi çalışma süresi) from two (2) to four (4) months to maintain employment continuity.

Additionally, within the Economic Stability Shield Program, the application procedures for short-time work funding, where 60% of the salaries of certain employees employed by qualifying employers would be covered by public funds have been simplified and the related procedures have be expedited. For further information please check our law-now article.

As the effects of the pandemic increase, the government has continued on to implement various sector-specific measures, for example:

  • The Revenue Administration launched the "Force Majeure Status Query Screen" on its interactive tax office website. Taxpayers can question whether their line of business is within the scope of “force majeure” and therefore if their tax obligations, such as declaration obligations, have been postponed;
  • VAT payments for March have been postponed for one (1) month;
  • Small and Medium Industry Development Organization (KOSGEB) receivables to be accrued until June 30, 2020 are postponed to 2021;
  • Public administrations will not accrue rental fees for the workplaces they have rented out to third parties whose activities have been halted by administrative decisions;
  • Lease amounts will not be collected for two (2) months from investors and commercial enterprises who are lessees in Techno parks;
  • Rediscount credits due by June 30, 2020 are to be given a 90-day maturity extension and a 12-month additional payment period for new rediscount credits has been granted;
  • Loans for work continuity with a 36-month maturity and an annual interest rate of 7.5% and a six (6) month non-payment period shall be provided by public banks;
  • A loan guaranteed by the credit guarantee fund (kredi garanti fonu), at a 9.5% annual interest rate and a three (3) month non-payment period will be provided to support the payment of cheques;
  • A complaint line has been created by the Banking Regulation and Supervision Agency (BRSA) for any complaints against banks;
  • Unpaid credit/cheques/promissory note/credit card debts from before March 24, 2020 will not be registered as such if they are paid or restructured by December 31, 2020;
  • For loans extended until December 31, 2020, borrowers will not be required to evidence that they have no outstanding tax payments or social security premium payments;
  • Medium-sized enterprises (with a turnover of up to TRY 125 million) were also included within the scope of “Trade Receivable Insurance”;
  • If contract terms are not met due to COVID-19 in public tenders, obtaining a time extension or terminating the contract is now possible;
  • Failure to pay the rental price between March 1, 2020 and June 30, 2020 for workplaces will not constitute a reason for termination and will not result in the evacuation of the lessee; and
  • The Ministry of Health approved the establishment of a mobile laboratory carrying out rapid diagnosis test of COVID-19 at the “Kapıkule Customs Gate”.

The government continues to work on new measures to prevent the effects of a pandemic, and we will continue to share developments on this matter with you.

For more information about the economic measures announced by the Turkish government please contact your regular CMS contact or our local experts Dr. Döne Yalçin or Sinan Abra.