PROFILE CONTENTS }} INTRODUCTION2 LEGAL AND REGULATORY
4
TAXATION7 BANKING13
Turkey*
PAYMENT INSTRUMENTS
14
PAYMENT SYSTEMS
16
CASH MANAGEMENT
18
ELECTRONIC BANKING
20
TRADE FINANCE
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USEFUL CONTACTS
23
* Guides specifically designed for treasury managers offering a detailed picture of the banking and cash management arrangements for an extensive range of locations. Please note the information is of a general nature only and is subject to change. It does not constitute financial, legal, tax or other professional advice.
Country Profile
TURKEY
INTRODUCTION }} General Capital/Other major cities: Area: Population: Language: Currency: Country telephone code: Weekend: National holidays: Source: www.goodbusinessday.com.
Business hours: Banking hours: Stock exchange: Leading share index:
Ankara/Istanbul, Izmir, Bursa, Adana, Gaziantep, Konya 783,562km2 81.62m Turkish Turkish lira (TRY) 90 Saturday and Sunday 2nd half 2015 — 30 Aug, 24–27 Sep*, 29 Oct 2016 — 1 Jan, 23 Apr, 1, 19 May, 5–7 Jul*, 30 Aug, 12–15 Sep*, 29 Oct 08:30/09:00–16:30/17:00 (Mon–Fri) 08:30/09:00–16:30/17:00 (Mon–Fri) Borsa Istanbul BIST 30 * The date shown may vary by plus or minus one day. These dates are derived by converting from a non‑Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon.
Government Legislature }}Parliamentary republic with a unicameral Grand National Assembly of Turkey (Türkiye Büyük Millet Meclisi). }}Grand National Assembly – 550 members elected to serve four-year terms. }}The president is directly elected every five years. Head of state }}Recep Tayyip Erdogan, president since 28 August 2014. Political leader }}Ahmet Davutoglu, prime minister since 28 August 2014.
Sectoral distribution of GDP (% of GDP) Agriculture Industry Services
8.9% 27.3% 63.8% (2013 estimate)
Please note that the information contained in this document is of a general nature only and is subject to change whether for economic, political, social or other reasons. It is not intended to be comprehensive and does not constitute financial, legal, tax or other professional advice on which you should rely. Accordingly if you are planning any business activity in the country or taking, or refraining from any action on the basis of the information in this document, you must obtain your own independent professional advice. The materials contained in this document were assembled in February 2015 (unless otherwise dated) and were based on the law enforceable and information available at that time. We make no representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it.
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Country Profile
TURKEY
Economy
2009
2010
Exchange rate*† (TRY/USD)
1.5500
1.5028 1.6750
2011
2012
2013
1.7960
2014
2015
Q2
Q3
Q4
Year
Q1
1.9038
2.1138
2.1621
2.2617
2.1886
2.4592
Interest rate* (Central Bank policy rate) (%)
9.24
5.81
2.99
5.00
3.75
8.00
7.50
7.50
7.75
7.25
Consumer inflation** (%)
+ 6.3
+ 8.6
+ 6.5
+ 8.9
+ 7.5
+ 9.4
+ 9.2
+ 8.8
+ 8.9
+ 7.5
Unemployment (%)
14.0
11.9
9.8
9.2
9.7
9.0
10.1
10.7
NA
NA
GDP volume growth** (%)
– 4.8
+ 9.2
+ 8.8
+ 2.2
+ 4.1
+ 2.2
+ 1.7
NA
NA
NA
953
1,099
1,298
1,416
1,565
–
–
–
NA
–
731
775
788
822
–
–
–
NA
–
10,135 10,604
10,653
10,972
–
–
–
NA
–
– 6.4
– 8.0
–
–
–
NA
–
GDP (TRY bn) †
GDP (USD bn) GDP per capita (USD) BoP (goods/services/income) as % GDP
615 8,627 – 2.4
– 6.4
– 9.9
* Period average. ** Year on year. † Effective 1 January 2005, the new Turkish lira (TRY) replaced the old Turkish lira (TRL) at a rate of TRY 1 per TRL 1 million. Sources: IMF, International Financial Statistics, May 2015 and 2014 Yearbook.
Country credit rating Fitch Ratings rates Turkey for issuer default as: Term
Local currency rating
Foreign currency rating
Short
–
F3
Long
BBB
Long-term rating outlook
BBB – Stable Source: www.fitchratings.com, June 2015.
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Country Profile
TURKEY
LEGAL AND REGULATORY }} Central bank }}Established in 1932, the Central Bank of the Republic of Turkey is an autonomous institution operating in accordance with the Law on the Central Bank of the Republic of Turkey of 1970 and its amendments.
Bank supervision }}The autonomous Banking Regulation and Supervisory Agency (BRSA) supervises the banking sector within Turkey.
Resident/non-resident status }}A company is considered resident in Turkey if it has its legal seat or place of effective management in Turkey.
Bank accounts }}Foreign exchange accounts and domestic currency (TRY) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are convertible into foreign currency. }}Non-resident bank accounts are permitted in both foreign and domestic (TRY) currency. Non-resident domestic currency accounts can be held abroad and are convertible into foreign currency. }}Interest can be offered on current and deposit accounts. }}Overdraft facilities are available to residents and non-residents.
Reporting }}All transactions between residents and non-residents must be reported on an aggregated basis to the Central Bank for balance of payments purposes every month. }}Direct investments and loans are reported on an individual basis, as are foreign currency transactions (not reported as imports, exports, trade in services, and capital flows) if they exceed USD 50,000. }}Banks are responsible for submitting transactions data to the Central Bank on behalf of their corporate clients. }}The accuracy of all reported information is the resident’s responsibility. }}Transactions data is collected via the International Transaction Reporting System (ITRS). ITRS forms are required to be submitted no later than the 21st day of the following month, and can be sent via mail on paper or by e-mail in an MSExcel file.
Exchange controls }}Turkey is a member of the Economic Cooperation Organisation (ECO), the Organisation of Islamic Cooperation (OIC), the Organisation for Democracy and Economic Development (GUAM), and the Organisation of the Black Sea Economic Cooperation (BSEC). }}The Turkish lira, locally known as Yeni Turk lirasi (TRY), is Turkey’s official currency. }}A bilateral TRY/CNY currency swap agreement worth TRY 3 billion was established by the Central Bank and the People’s Bank of China in February 2012 for an initial period of three years.
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TURKEY
}}A bilateral TRY/PKR currency swap agreement worth USD 1 billion was established by the Central Bank and the State Bank of Pakistan in September 2012 for a period of three years. }}Exchange controls and regulations are administered by the Central Bank and the Undersecretariat of Treasury. }}Foreign currency consumer and mortgage credits are not permitted to be issued from non-residents or resident banks to resident individuals. }}Resident insurance companies are not permitted to offer loans to non-residents (with the exception of OECD member countries’ financial institutions) if the credit accounts for part of their technical reserves. }}The issue and sale of securities by non-residents need to be registered with and approved by the Capital Market Board. All securities to be issued and sold abroad by residents must also be registered and approved. }}Non-resident investment in mining, petroleum exploration and refining, transport, electricity, broadcasting, and accountancy is subject to restrictions. }}All proceeds from foreign investment that are transferred abroad are required to be reported to the Central Bank.
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TURKEY
Anti-money laundering/counter-terrorist financing Supplied by BCL Burton Copeland (www.bcl.com). Data as at January 2015.
}}Turkey has broadly implemented the requirements of the EU Money Laundering Directives in its legislation (Law on Prevention of Money Laundering No 4208 of 1996, largely repealed by Law on Prevention of Laundering Proceeds of Crime No 5549 of 2006; the Turkish Criminal Code No 5237 of 2005, most recently updated by Law No 5918 of 2009; the Anti-Terror Law No 5532 of 2006; and Law No 6415 on the Prevention of the Financing of Terrorism 2013. The Financial Crimes Investigation Board has issued a series of related General Communiqués and Regulations of 2008). The Council of Ministers has also issued a related Decree. }}A Financial Action Task Force (FATF) member, Turkey observes most of the FATF standards. Turkey has observer status in the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG). }}Turkey has established a financial intelligence unit, the Mali Suçlari Arastirma Kurulu (MASAK) or Financial Crimes Investigation Board, which is a member of the Egmont Group. }}Account opening procedures require formal identification of customers establishing a permanent business relationship. }}Customers making a single or series of linked transactions exceeding TRY 20,000 must be identified. For wire transfers the threshold is TRY 2000. }}Tax identity information must be recorded for all customers opening new accounts, applying for chequebooks or cashing cheques. Tax identity information must also be recorded for cash transfers and exchange transactions at thresholds determined by the Ministry of Finance. }}Customers must be identified before the business relationship is established or the transaction conducted, and their addresses must be verified. }}Beneficial owners must be identified. When establishing a permanent business relationship, banks and other major financial institutions must require customers to provide a written declaration stating whether they are acting in their own name or on behalf of a beneficial owner. If they are acting for a beneficial owner, the statement must include the beneficial owner’s details. }}Financial institutions in the broadest sense are required to report suspicious transactions to the MASAK. }}All records must be kept for at least eight years.
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TURKEY
TAXATION }} All tax information supplied by Deloitte Touche Tohmatsu (www.deloitte.com) and Deloitte Highlight, 2015.
Resident/non-resident }}A company is considered resident if its seat and/or place of effective management are located in Turkey.
Tax authorities }}Ministry of Finance. }}Presidency of Revenue Administration.
Tax year/filing }}A company’s tax year need not necessarily coincide with the calendar or fiscal year, although this is the norm. }}Corporate tax returns must be filed between the first and 25th days of the fourth month following the end of the tax year. }}Corporate income tax is payable by the end of the month in which the tax return is due (i.e. by the end of April for companies using the calendar year). }}Corporations are required to pay advance corporate tax at 20% based on their quarterly profits. Advance payments made during the year are offset against the ultimate corporate tax liability, which is determined in the annual corporate income tax return. Advance corporate tax returns must be submitted by the 14th day of the second month following the quarterly period, and the tax is payable by the 17th of the same month (the Ministry of Finance may extend the deadline for submission of quarterly advance tax returns). }}Turkey does not allow for tax consolidation; each company in a group must file its own corporation tax return.
Corporate taxation }}A reduced rate applies on earnings derived from investments in specified sectors/regions. }}The standard corporate tax rate is 20%. }}There is no alternative tax or surtax. }}Residents are subject to taxation on their worldwide income. Non-resident companies are subject to taxation on income derived from sources in Turkey. }}Tax losses may be carried forward for five years, but may not be carried back, except where the company is liquidated. }}Various incentives are available. An allowance is available until 31 December 2023 to companies that carry out qualifying R&D activities. The allowance is equal to 100% of R&D expenditure and is available in addition to a deduction for the R&D expenditure in the statutory accounts. Further, 80% (90% for employees holding a PhD) of the income tax computed on the wages of R&D personnel is exempt from income withholding tax; 50% of the social security premium contributions paid for each R&D employee will be compensated by the Ministry of Finance (up to 10% of the total number of full-time R&D employees); and activities documents prepared with respect to the R&D activities are exempt from stamp duty. To qualify for the benefits, the R&D centre must be set up outside designated technology development zones (TDZs) and at least 30 full time R&D employees must be employed in the R&D centre.
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}}Income derived from the development of software and R&D activities carried out in TDZs is exempt from income and corporate income taxes until 31 December 2023. Salaries of the R&D and support personnel (up to 10% of the total number of R&D employees) employed in a TDZ to carry out R&D and software development activities are exempt from all taxes until 31 December 2023. Deliveries of software (for systems management, data management, internet, mobile and military command control applications, etc.) developed as a result of activities in a TDZ also are exempt from VAT until 31 December 2023. }}Companies operating in Turkish free trade zones (FTZs) based on a valid operation licence obtained before 6 February 2004 benefit from tax exemptions (exemptions for trading activities are abolished after that date). A tax exemption is provisionally available for manufacturing activities. Earnings from commercial activities other than manufacturing are subject to a 20% corporate income tax rate. }}An income tax withholding exemption is available for companies engaged in manufacturing within Turkish FTZs and that export at least 85% of the total ‘FOB value’ of the products manufactured within the zone. This exemption will be provisionally applicable until the end of the year in which Turkey becomes an EU member state. }}A reduction of up to 90% of the corporate income tax rate may be granted on earnings derived from investments in specified regions/cities and sectors. }}Documents prepared in relation to the activities carried out in FTZs are exempt from stamp tax, and such transactions are exempt from charges. Financial instruments }}There are no specific tax rules for financial instruments. Interest and financing costs }}There are no specific tax rules regarding interest and financing costs, apart from the Banking and Insurance Support Fund (BISF) and the Resource Utilisation Support Fund (RUSF). Finance expenses incurred in relation to the acquisition of company shares may be subject to challenge by the tax authorities. Foreign exchange }}The rate announced by the Central Bank is used for foreign exchange conversions. Accounting books must be kept in TRY. However, companies may be entitled to keep their books in a foreign currency through a government decree, provided that their paid-in capital is at least USD 100 million or its equivalent in another currency and at least 40% of the capital belongs to a non-resident person.
Advance tax ruling availability }}Advance tax rulings are available in Turkey in order to establish the tax authority’s approach to undefined tax practices. In order to obtain an advance ruling, taxpayers must apply to the tax authorities. Advance tax rulings provide immunity against tax penalties and delay interest (effective from 1 August 2010), if challenged by an independent body.
Disclosure requirements }}Certain disclosures must be made in the footnotes attached to the statutory financial statements submitted to the tax office, together with the corporate tax return.
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TURKEY
Capital gains tax }}Capital gains derived by a resident corporation are taxed at the standard corporation tax rate of 20%. }}75% of capital gains derived from the sale of local participations are exempt from corporation tax if the following conditions are satisfied: }}The property has been held for at least two years; }}the gains are kept in a special fund account under shareholder equity for five years following the year of the sale; }}The exempt profits are not transferred within the specified period to another account (except for transfers to the capital account by way of a capital injection); }}The consideration for the sale is collected by the end of the second calendar year following the year of the sale; and }}The company does not hold the participations for the purpose of an ordinary business involving the trading of participations. }}Capital gains derived from the sale of foreign participations that have been held for at least two years by an international holding company resident in Turkey are exempt from corporate income. }}To qualify as an international holding company: }}A Turkish company must be a corporation (Anonim Sirket – AS); }}At least 75% of its total assets (excluding cash items) must be comprised of foreign participations that have been held for a continuous period of at least one year; }}The Turkish company must hold at least 10% of the capital of each foreign participation; and }}The foreign participation must be in the form of a corporation or a limited liability company. }}The sale by a non-resident of unquoted shares or stock in a Turkish incorporated company to another non-resident will not normally be subject to Turkish capital gains tax. However, this may still be challenged, due to the fact that the legal seat is situated in Turkey. }}Where the sale of such unquoted shares is made by a non-resident corporation to a Turkish resident, the gain is subject to corporate tax at 20%, plus a further corporate withholding tax of 15% on after-tax profits if they are repatriated. (The withholding tax may be further reduced under a double tax treaty.) }}Capital gains arising from quoted shares acquired on or after 1 January 2006, government bonds and Treasury bills issued after 1 January 2006 (including private sector bonds), and derivative instruments issued through the Turkish Derivatives Exchange, are subject to withholding tax at either 0% or 10%.
Withholding tax (subject to tax treaties) Payments to:
Interest
Dividends
Royalties
Other fees
Resident companies Non-resident companies
0–15%
0%
None
None
0–10%
15%
20%
20%
}}Interest income arising from deposit accounts is subject to a 15% withholding tax rate. The provider is liable to deduct the tax before payment. }}Interest on loans payable to a foreign state, international institution or foreign bank or foreign corporation that qualifies as a ‘financial entity’ is subject to a 0% withholding tax. A 10% rate applies to interest paid on loans from other nonresident entities, unless the rate is reduced under a tax treaty.
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}}Withholding tax of 15% is levied on all dividends (except for dividends distributed by a resident company to another resident company, and Turkish branches of non-resident companies). The rate levied on dividends paid to non-residents may be reduced through tax treaties, provided that the shares in the distributing company are registered in the names of shareholders, rather than issued as bearer shares. }}Withholding tax of 20% is levied on royalties paid to non-resident companies. }}There are also a variety of sources of income that are subject to withholding tax at specific rates established by the Council of Ministers. }}Transactions with parties resident in countries/regions that are deemed to cause harmful tax competition (as yet to be determined by the Council of Ministers) are considered related party transactions. Payments made by resident companies to such parties are, in principle, subject to a 30% withholding tax (with some exemptions). However, the 30% withholding tax cannot be applied until the Council issues the list of relevant countries/regions.
Tax treaties/tax information exchange agreements (TIEAs) }}Turkey has exchange of information relationships with 110 jurisdictions through 82 double tax treaties, five TIEAs and one multilateral mechanism.
Thin capitalisation }}The thin capitalisation rules apply when loans from shareholders or related parties exceed a 3:1 debt-to-equity ratio at any time in an accounting period (six times shareholder equity for loans from related party banks or financial institutions). Related parties for these purposes are defined as shareholders and persons related to shareholders that own, directly or indirectly, 10% or more of the shares, voting rights or the right to receive dividends of the company. The amount of equity is that determined under the Tax Procedures Code at the beginning of the accounting period. }}Where the debt-to-equity ratio is exceeded, interest payments in excess of the safe harbour ratio will be deemed to constitute a hidden profit distribution or a remittance of profits as of the last day of the accounting period in which the conditions for application of the thin capitalisation rules are satisfied and, therefore, subject to the 15% dividend withholding tax. Related expenses, foreign exchange losses and interest payments are non-deductible.
Transfer pricing }}When a transaction between related parties (whether or not residents) is not carried out on arm’s-length terms, profits arising from the transaction will be deemed to be constructive dividends subject to both corporate income tax and dividend withholding tax. The transfer pricing rules provide for the comparable uncontrolled price, cost-plus and resale price methods, as well as profit-based methods (e.g. profit-split and transactional net margin methods). However, a taxpayer may adopt another method based on its particular circumstances. }}Taxpayers are required to maintain documentation to support their transfer pricing. Corporate taxpayers that are registered with the tax office of the largest taxpayers (large taxpayer office) must prepare an annual transfer pricing report with respect to domestic and foreign-related party transactions. Those registered with other tax offices only have to prepare the annual report with respect to their foreign-related party transactions.
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}}Taxpayers registered with the large taxpayer office also must include their transactions with related parties in Turkish free trade zones (including branches) and their branches abroad in their annual transfer pricing report, and corporate taxpayers operating in free trade zones must prepare an annual transfer pricing report with respect to domestic related party transactions. }}Unilateral, bilateral and multilateral advance pricing agreements may be concluded with the Ministry of Finance.
Stamp duty }}Stamp duty applies at rates ranging from 0.189–0.948%, depending on the type of document.
Cash pooling }}Turkey has no specific tax rules for cash pooling arrangements.
Sales taxes/VAT (incl. financial services) }}VAT is levied on the supply of all goods and services upon delivery and on all goods imported into Turkey. The standard rate of VAT is 18%. }}Banks, insurance companies and brokerage houses are exempt from VAT, but banking and insurance transactions are taxed on the individual. }}A reduced rate of 8% is levied on basic food products, land vehicles (other than passenger vehicles), health services, veterinary products, printed materials, medicines, infant food, serum, vaccines, entertainment, certain educational services, education transportation services and blood products. }}A reduced rate of 1% applies to newspapers and magazines, second-hand cars, the processing and delivery of agricultural commodities, and funeral services. }}Investment allowance certificates, which can be obtained in certain circumstances from the Undersecretariat of the Treasury, provide VAT and customs duty exemption.
Special consumption tax (excise tax) }}Special consumption tax merged 16 different taxes, levies and duties under a single tax. The rates are as follows: }}Motor vehicles, ships and aircraft: between 0.5% and 130%, depending on the customs tariff position number of the item; }}Petroleum products: fixed amounts that vary, depending on the customs tariff position number of the item; }}Alcoholic drinks and tobacco products: between 25% and 65%, depending on the customs tariff position number of the item; and }}Luxury goods (cosmetics, refrigerators, electrical home appliances, cellular phones, etc): between 6.7% and 25%. }}Besides the percentage tax on alcoholic drinks and tobacco products, there is also a minimum lump sum tax, varying between TRY 0.0375 and TRY 105.80.
Real property tax }}Real property tax is levied based on the value of land or buildings. Rates are as follows: }}0.2% for buildings in general; }}0.1% for dwellings; }}0.1% for land in general; and }}0.3% for building sites. }}The rates are increased by 100% for buildings and land located within large cities.
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}}The square metre rates for valuing buildings depend on the location of the property. }}An environment tax is levied by the municipalities on buildings used, inter alia, as a place of business. Tax is levied at fixed amounts that change annually based on defined categories. The resident of the building (either the landlord or the tenant) is liable for the environmental tax. The landlord is responsible for making a compulsory contribution to the municipality at a rate of 10% of the annual accrued real estate tax for the protection of immovable cultural property. The contribution is levied through the real estate tax. Real property tax paid by companies is deductible from the corporation tax base.
Transfer tax }}The registration of a transfer of real estate is subject to a real estate transfer tax. The tax is calculated as 4% of the acquisition/transfer value and is split equally between the buyer and the seller.
Financial transactions/banking services tax }}A banking and insurance transaction tax applies at a general rate of 5% on bank and insurance charges. }}Banks are required to withhold a contribution to the resource utilisation support fund on the principal amounts of foreign-denominated loans with an average maturity period of three years or less. The rate is 3% for loans of less than one year, 1% for loans with an average maturity period of at least one year or two years and 0.5% where the average maturity period is at least two to three years. A 3% contribution also applies to the interest accrued on TRYdenominated loans irrespective of their maturity. In addition, imports realised on credit are subject to a 6% withholding tax.
Payroll and social security taxes }}There are no payroll taxes payable by employers. }}Both the employer and the employee must make social security contributions. The general rates are 20.5% for the employer (although the employer share for long-term risk is 6% instead of 11% if the monthly social security declarations are submitted on time and there are no unpaid social security premiums, penalties or unemployment premiums for current and previous months) and 14% for the employee. }}Employers and employees must also contribute to the Unemployment Benefit Plan at rates of 2% and 1%, respectively, based on the gross salary of the employee (subject to the maximum base applicable for the social security premium calculations).
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BANKING }} Major banks
Total assets (USD millions) 31 December 2013
Bank .
Isbank (Türkiye I¸s Bankası)
111,993
Türkiye Garanti Bankası
101,324
TC Ziraat Bankası
98,479
Akbank
90,362
Yapi ve Kredi Bankası
74,370 Source: www.accuity.com, November 2014.
Overview }}There are 49 banks operating in Turkey, of which13 are investment banks, 26 are commercial banks, four are participation banks and six are branches of foreign banks. There are also 48 representative offices of foreign banks. }}The country’s five largest banks control approximately 58% of the banking sector’s total assets. }}Three of Turkey’s seven largest banks – TC Ziraat Bankası, Halkbank and Vakifbank – are state owned. Four investment banks are also state owned. Approximately 30% of the banking sector’s total assets are state controlled. }}There are four private participation (Islamic) banks operating over 860 branches in Turkey – Albaraka Turk, Bank Asya, Kuveyt Turk and Turkiye Finans. In October 2014, the state-run TC Ziraat received approval to establish an Islamic unit and just two months later, the state-run Vakifbank and Halkbank both annouced plans to set up Islamic units. }}Foreign banks play an active and prominent role in the country’s banking sector. At present, 13 commercial banks and three investment banks in Turkey are foreign owned. In 2013 Commercial Bank of Qatar acquired 71% of Alternatifbank and in April 2014, Industrial and Commercial Bank of China aacquired 75% of Tekstilbank. }}In 2012, Lebanon’s Bank Audi was granted the first commercial banking licence in more than a decade. Bank Audi trades as Odea Bank in Turkey. }}Foreign banks accounted for approximately 15.3% of the country’s total banking assets at the end of June 2014.
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PAYMENT INSTRUMENTS }} Payment statistics
Millions of transactions 2012
Cheques
2013
% change 2013/20121
Traffic (TRY billion) 2012
2013
% change 2013/2012
18.48
17.19
– 7.0
316.76
349.85
10.4
197.11
231.96
17.7
33,277.49
42,417.84
27.5
Debit card payments
1,319.21
1,523.84
15.5
315.44
370.09
17.3
Credit card payments
2,503.31
2,705.27
8.1
365.13
427.70
17.1
Total
4,038.11
4,478.26
10.9
34,274.82
43,565.48
27.1
Credit and debit transfers*
* Including all payments processed by the RTGS system.
Sources: Bank for International Settlements, CPSS–Red Book statistical update, September 2014; and Interbank Interbank Card Centre (BKM).
Cash }}Cash is an important payment medium in Turkey, particularly for low-value retail and commercial transactions.
Credit transfers }}All credit transfers in Turkey are automated. }}Credit transfers are used for both high-value and low-value payment transactions. }}Credit transfers are used by companies for salary and supplier payments. }}Credit transfers can be initiated via bank branch, ATM, telephone, mobile or online. }}Domestic credit transfers are cleared and settled via EFT3, the national RTGS system, in real time.
Direct debits }}Direct debits are available in Turkey, but not widely used. }}Direct debits are cleared on an intrabank basis only.
Cheques }}Cheque use in Turkey is in decline due to the increasing preference for electronic payments for both high-value and low-value transactions. }}Cheques are principally used for large-value commercial payments. }}Cheques are MICR-encoded and processed electronically via the Ankara and Istanbul Interbank Clearing Houses (ICHs). The ICHs provide same‑day clearing for cheques, although overall net settlement occurs the next business day at 12:00 local time. Funds are available to beneficiaries within four to six days. }}Traveller’s cheques are issued in all leading currencies by banks and are relatively commonplace.
Card payments }}The use of payment cards in Turkey has increased rapidly in recent years. }}There were 57.0 million credit cards and 105.5 million debit cards in circulation at the end of 2014. }}Credit and debit cards accounted for 60.4% and 34.0% respectively of all cashless payments in 2013; the value of payment card transactions over the same period was negligible. }}Visa and MasterCard are the principal payment card brands issued in Turkey.
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}}The Interbank Card Centre (Bankalararasi Kart Merkezi – BKM) clears all card payments involving its 27 member banks. All member banks must be a member of Visa or MasterCard. }}Other card payments are cleared via correspondent banking arrangements. }}There were 45,576 ATM terminals and 2.39 million POS terminals operating in Turkey at the end of 2014. All ATMs and POS terminals are EMV compliant. }}The BKM provides a national ATM and POS network for debit cards issued by its member banks. Banks also provide proprietary ATM networks.
Other payments Promissory notes }}The promissory note is a popular payment instrument in Turkey with small and medium-sized enterprises. Promissory notes can be discounted by commercial banks. }}Promissory notes are cleared by the ICHs. Postal instruments }}Postal cheques and postal money orders are available via the General Directorate of Post, Telegraph and Telephone (PTT). }}Postal cheque accounts are often used by companies to collect recurring payments, and by government institutions to collect tax. }}Around 4400 PTT offices provide postal money order facilities. }}Domestic postal money orders can be sent in TRY, EUR or USD. There is a maximum value threshold of TRY 20,000, EUR 3000 and USD 3000. }}Postal money orders can be sent to and from over 200 other countries and territories via the Western Union money transfer service.
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PAYMENT SYSTEMS }} Type }}The Electronic Fund Transfer (EFT3) system, Turkey’s new generation national real-time gross settlement (RTGS) system, is operated by the Central Bank. }}Ankara and Istanbul Interbank Clearing Houses (ICHs) operate together as a deferred net settlement system for cheque payments. }}BKM (Bankalararasi Kart Merkezi – Interbank Card Centre) is a deferred net settlement system operated by its members. }}The Central Bank also operates a giro system, primarily used by non‑TIC‑RTGS participants, which processes credit transfers between its 21 branches on a real-time basis. A low volume of payments are processed through this system. }}Cross-border payment instructions are routed via SWIFT and settled through accounts held with correspondent banks abroad.
Participants }}There are 49 direct participants in EFT3. }}There are 40 direct participants in the ICHs (of which four are engaged in clearing cheques with physical presentation only). }}There are 28 participants in the BKM.
Transaction types processed }}EFT3 processes all TRY-denominated funds transfers. There is no value threshold. In addition, EFT3 also effects the final settlement of participants’ net balances originating from the ICHs and BKM. }}The ICHs process domestic cheque payments and promissory notes. }}The BKM processes all card payments involving its participants.
Operating hours }}EFT3 operates from 08:00 to 17:30 TST (Turkish Standard Time) on Monday and reopens at 20:30. It then remains open until 17:30 the following evening before reopening at 20:30. These operating hours continue until Friday evening. }}The ICHs operate 24 hours a day, Monday to Friday. }}The BKM operates 24 hours a day, seven days a week.
Clearing cycle details EFT3 }}EFT3 settles transactions individually in real time and with immediate finality. }}Payment instructions are exchanged online from 08:30 TST on Monday morning. }}Banks transmit payment instructions to the system via TICNET, a private telecommunications network owned by the Banks Association of Turkey. }}The KRED-SWIFT payment message was introduced in 2007. }}Settlement takes place across the participant banks’ correspondent accounts at the Central Bank.
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ICHs }}Cheques are MICR-encoded and are truncated into electronic items before being processed via the ICHs. }}06:00 TST: cut-off time for same-day settlement. Information received during the previous 24 hours is transmitted to the banks to allow them to make the necessary provisions before the start of the clearing session at 09:00 TST. }}16:00 TST: clearing process finishes. }}At the end of the daily clearing session, the ICHs transmit the daily results of their cheque clearing to the Ankara ICH, which calculates each participant’s credit and debit balance. Each participant is informed of its credit and debit balances at approximately 17:00 TST. Debtor banks have to pay their daily clearing debts to the Ankara ICH by no later than 12:00 TST on the following business day. }}Final net settlement takes place via EFT3 until 12 noon on the following business day (T+1) across special ICH settlement accounts held at the Ankara branch of the Central Bank. BKM }}Card payments are cleared by the BKM before the net balances of each member are forwarded to the Central Bank. }}Final net settlement takes place via EFT3 until 12 noon on the following business day (T+1) across special ICH settlement accounts held at the Istanbul branch of the Central Bank.
Currency centre holidays* 2nd half 2015 2016
30 Aug, 24–27 Sep**, 29 Oct 1 Jan, 23 Apr, 1, 19 May, 5–7 Jul**, 30 Aug, 12–15 Sep**, 29 Oct ** The date shown may vary by plus or minus one day. These dates are derived by converting from a non‑Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon. * Source: www.goodbusinessday.com.
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CASH MANAGEMENT }} Domestic Notional pooling }}Notional pooling is not available in Turkey. Cash concentration }}Single currency cash concentration is permitted. }}Cash concentrationis permitted between resident and non-resident accounts. }}Cross-currency cash pools are not permitted. }}Central bank reporting requirements apply.
Cross-border }}Cross-border cash concentration is permitted, but rarely practised.
Lifting fees }}Banks apply different value dating and pricing to transfers between residents and non-residents.
Short-term investments }}Interest can be earned on all resident and non-resident bank accounts. }}Demand and time deposits are available in TRY or major foreign currencies. Most time deposits have maturities of one, three, six or 12 months. }}Certificates of deposit are offered by commercial banks with maturities of up to one year, but are rarely used. }}Bank bills are promissory notes issued by investment banks and development banks. }}Commercial paper is issued by larger companies, with maturities ranging up to a few years. }}Treasury bills are issued by the Undersecretariat of Treasury, with maturities of three, six, nine or 12 months. }}Repurchase agreements on government securities are typically issued, with maturities of one, two or four weeks or, on occasion, three months. }}Banker’s acceptances are available. }}Mutual investment funds are available.
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Custody and securities settlement Information provided by www.globalcustody.net, www.mkk.com.tr and www.takasbank.com.tr, 2015.
Depositories }}Central Registry Agency (Merkezi Kayit Kurulusa). }}Takasbank. }}The Central Registry Agency acts as a central securities depository (CSD) for equities, ETFs, government bonds, corporate bonds, T-bills, commercial paper, investment funds and rights and warrants. }}Takasbank acts as a CSD for equities, ETFs, government bonds, corporate bonds, T-bills, commercial paper, investment funds and rights and warrants. Settlement }}Takasbank is authorised to provide cash and securities settlement transactions as the central clearing and settlement institution to Borsa Istanbul for equities, debt securities, foreign securities, derivatives and precious metals markets. Securities delivery/receipt as well as cash obligations of Borsa Istanbul members arising from the buy-sell transactions in the related markets are executed via Takasbank. Central counterparty }}Takasbank. BIS Model }}Model 1: transactions between direct and indirect participants (i.e. broker‑to‑custodian). }}Model 3: exchange transactions between direct participants. Settlement cycle }}T+2 for equities. }}T+0 for bonds. }}T+3 for Eurobonds.
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ELECTRONIC BANKING }} }}Electronic banking is available in Turkey and offered by all of the country’s commercial banks. }}There is no bank-independent electronic banking standard in Turkey; each bank offers its own proprietary system for corporate banking purposes. }}Services available include balance and transaction reporting and payment initiation. }}Internet banking is offered by 28 banks in Turkey. Services available include balance and transaction reporting and payment initiation. }}There are 36.4 million account holders registered to bank online. }}Turkey had an internet penetration rate of 56.7% at the end of June 2014. }}Mobile banking is offered by 15 banks in Turkey. There are approximately 8.7 million registered mobile banking customers.
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TRADE FINANCE }} Trading partners* Import Export
Russia 11.3%, Germany 9.0%, China 9.0%, USA 6.0%, Italy 5.6%, Iran 5.1%. Germany 8.6%, Iraq 7.1%, Iran 6.5%, UK 5.7%, UAE 5.4%, Russia 4.4%, Italy 4.2%, France 4.1%. * The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013 (www.cia.gov/library/publications/the-world-factbook/index.html).
Imports Documents }}In order to import goods into Turkey, a customs declaration, commercial invoice, bill of lading and certificate of origin are required. Licences }}Import licences are mandatory for items such as machinery, motor vehicles and certain chemicals. }}Permission from the Ministry of Customs and Trade is required for importing old, used, faulty or obsolete goods. }}Licences with quotas are required for importing textile and clothing products from two non-WTO member countries. Taxes/tariffs and other fees }}Turkey applies the EU customs code and integrated tariff with regard to imports. }}Turkey has signed free trade agreements with the EU, the European Free Trade Association (EFTA) member states (Iceland, Liechtenstein, Norway and Switzerland), Albania, Bosnia and Herzegovina, Chile, Egypt, Georgia, Israel, Jordan, Lebanon, Macedonia, Malaysia, Mauritius, Montenegro, Morocco, Palestine, Serbia, South Korea, Syria and Tunisia. }}The Economic Cooperation Organisation plans to establish a free trade area between its ten member states in 2015. Although signed, the Economic Cooperation Organisation Trade Agreement has not yet entered into force. }}Imports of industrial products are subject to an average tariff of 4.2%. }}Imports of agricultural products are subject to a simple average tariff of 30%. }}The weighted average tariff for all imports into Turkey is 3.95%. }}Certain imports from the 50 or so least-developed countries benefit from Generalised System of Preferences (GSP) tariff rates. Zero-rated tariffs are applied to cetain types of industrial products and agricultural products (covered by the EU–Turkey customs agreement). Prohibited imports }}A negative list (of products that may not be imported) is in operation. }}It is prohibited to import certain commodities into Turkey, in order to protect fauna and flora, and for national security and moral reasons.
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Exports Documents }}In order to export goods from Turkey, a commercial invoice, customs declaration, bill of lading, packing list and certificate of origin are required. Licences }}Export restrictions apply to certain works of art, articles of cultural or historical value and goods that are few in number, in addition to certain commodities that may endanger fauna or national security, or which are deemed morally unacceptable. Taxes/tariffs and other fees }}Export taxes are levied on exports of hazelnuts and unprocessed leather. Prohibited exports }}A negative list (of products that may not be exported) is in operation. }}Exporting certain works of art and articles of cultural or historical value is prohibited.
Financing imports and exports Imports }}There are no financing requirements for imports. Exports }}There are no financing requirements for exports.
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USEFUL CONTACTS }} Central Bank of the Republic of Turkey
www.tcmb.gov.tr
Leading banks:
Akbank
www.akbank.com
Isbank
www.isbank.com.tr
TC Ziraat Bankası
Türkiye Garanti Bankası
Yapi ve Kredi Bankası
www.ziraat.com.tr www.garanti.com.tr www.yapikredi.com.tr
Banking Regulation and Supervision Agency
www.bddk.org.tr
Banks Association of Turkey
www.tbb.org.tr
Participation Banks Association of Turkey
www.tkbb.org.tr
Undersecretariat of Treasury
www.treasury.gov.tr
Ministry of Finance
www.maliye.gov.tr
Ministry of the Economy
www.economy.gov.tr
Ministry of Customs and Trade
www.gtb.gov.tr
The Union of Chambers and Commodity Exchanges of Turkey Istanbul Chamber of Commerce
www.tobb.org.tr www.ito.org.tr
Privatisation Administration
www.oib.gov.tr
Investment Support and Promotion Agency
www.invest.gov.tr
International Investors Association
www.yased.org.tr
Borsa Istanbul
www.borsaistanbul.com
Central Registry Agency of Turkey
www.mkk.com.tr
Interbank Clearing Houses Centre
www.btom.org.tr
Interbank Card Centre
www.bkm.com.tr
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