The Turkish Banking, Regulation and Supervision Agency (“Agency”) has amended rules for financial leasing, factoring and financing companies. The changes focus on Islamic financing, applying particularly to participation banks and interest-free financial institutions. Notable amendments address the specific disclosure of interest-free principles in articles of association and loan agreements, as well as requirements to follow these principles in practice.
Notable changes include:
– For companies which operate on an interest-free basis, any reference to “interest” in relevant rules for accounting practices and financial statements will be interpreted as “dividends”.
– The articles of association for companies operating on an interest-free basis must now specifically state that operations are based on interest-free principles and the company should operate on such principles.
– Loan agreements made by companies operating on interest-free basis must now also comply with interest-free principles.
– The Agency can now prevent loans being included in equity capital calculations if:
– The dividend rates applied to equity debts by companies operating on an interest free basis is not clearly stated in the agreement; or
– The dividend rate is higher than the market standard.
Please see these links for the full texts of the amendment regulations, published in Official Gazette number 30217 on 21 October 2017 (only available in Turkish):
Turkey has introduced a rule that municipalities, special provincial administrations and related entities must now use at least 51% domestic goods when manufacturing subways, light rail systems, trams and similar vehicles.
Provisions in secondary legislation which prevent domestic production and provision of domestic services will no longer apply.
Under the new rules, these entities must also take all measures possible to encourage domestic production, in order to expand use of domestic products and services during tenders and other domestic production and procurement projects.
The Prime Ministry published Circular No. 2017/22 in Official Gazette number 30233 on 7 November 2017. Please see this link for the full text of the Circular (available only in Turkish).
Turkey has tightened rules for products which protect plants from pests. The updated regime addresses processes and responsibilities for testing these products, as well as launching them to the market. The amendments also introduce new rules for advertising such plant protection products.
Testing Plant Protection Products
Rules for testing plant protection products have been updated, including aspects such as biological effectiveness, remnants, side effects, toxicological and ecotoxicological tests.
The updated rules address:
– Qualities of the testers.
– The legal entities and associations which are entitled to test plant protection products.
– Conditions for authorization and time extensions.
– Work conditions and health checks for testers.
– Responsibilities for entities which test plant protection products.
The General Directorate of Food and Control must now audit the legal entities which test plant products and can cancel authorizations for entities which fail to meet their responsibilities.
Launching Plant Protection Products
Requirements for launching plant protection products have been tightened, introducing advertising rules and reducing time periods for authorizations, renewals and temporary use.
Accordingly, the validity of authorizations and renewal periods have now been reduced to three years.
Technical materials used in the plant protection products must now comply with specifications foreseen by the World Health Organization and United Nations Food and Agriculture Organization.
New provisions have been introduced for packages, labels and advertisements of plant protection products. Notable aspects include:
– Unlicensed products must not be advertised.
– Advertisements must include phrases like:
– “Use plant protection products cautiously”
– “Please read labels and product information before using plant protection products”
– Advertisements must not include deceptive phrases or graphics (such as “low risk” or “non-poisonous”) which may cause risk for human and animal health.
– Advertising phrases must be technically verifiable.
Please see these links for full text of the Regulations, published in Official Gazette number 30235 on 9 November 2017 (only available in Turkish):
Turkey’s Public Oversight, Accounting and Auditing Standards Authority (“Authority”) has introduced mandatory continuing professional education requirements for independent auditors. Auditors who fail to complete the necessary training credits will be suspended and shown inactive on the official registry, until they prove they have finished the necessary training.
The training obligation will apply from 1 January 2018 for auditors who were registered before 1 January 2017. Otherwise, the obligation will begin on the second calendar year following an auditor’s official registration.
Auditors will be required to complete 120 credits within a three years period, including at least 60 credits from primary professional subjects. The training obligation also continues while operating licenses or audit activities are suspended.
Auditors who fail to complete the necessary training credits will be suspended and shown inactive on the official registry. To resume activities as an independent auditor, a suspended individual will be required to submit documents indicating they have completed the necessary training.
Trainings will be available as face-to-face, distance, on-the-job training, academic studies, or other training activities.
The Communiqué on Continuing Training for Independent Auditors was published in Official Gazette number 30230 on 4 November 2017. Please see this link for the full text of the Communiqué (only available in Turkish).
Turkey’s Ministry of Finance has announced the revaluation rate for 2017 as 14.47%. The rate will also apply to the last provisional taxation period of 2017. The revaluation rate is used to update various taxes, administrative penalties and other monetary amounts on an annual basis. The revaluation rate determined for 2016 was 3.83%.
The 2017 rate was announced via Tax Procedural Law General Communiqué No. 484 (“Communiqué”), published in the Official Gazette number 30237 on 11 November 2017.
The Tax Procedure Law No. 213 defines the revaluation rate as the increase rate for the Domestic Producer Price Index. The Turkish Statistical Institute announces the rate during October each year (including October), as a comparison with the same period in the previous year. The Ministry announces the rate in the Official Gazette.
Please see this link for full text of this Communiqué (only available in Turkish).