Companies with Foreign Currency Cash Assets Exceeding 15 Million TL Cannot Use TL Loans

Tax Circular 2022/86 Companies with
Foreign Currency Cash Assets Exceeding 15 Million TL Will Not Be able to Use TL Loans

With the Banking Regulation and Supervision Board Decision (BRSA) dated 24.06.2022 and numbered 10250, important changes were made regarding the use of TL denominated loans in order to strengthen financial stability and to use resources more efficiently and to operate the credit system effectively.
 
The changes made are as follows:

• In case the Turkish Lira (TL) equivalentof foreign currency (FX) cash assets (including gold, effective foreign currency and FX deposits in banks ) of the companies subject to independent audit (the Company) is over 15 million TL as of the date of loan application ; If the FX cash assets of these Companies exceed 10 percent of their total assets or net sales revenue of the last 1 year according to the most recent financial statements,a new cash commercial loan in TL cannot be extended to the said Companies.
• For companies that are obliged to prepare consolidated financial statements in accordance with the accounting and financial reporting standards published by the Public Oversight, Accounting and Auditing Standards Authority, this assessment will be made on the consolidated balance sheets .
• Limited to the companies that cannot use foreign currency loans in accordance with the relevant legislation, it is determined that these companies have a foreign currency net position gap within 3 months from the date of their loan application to the bank , by independent audit institutions authorized by the Public Oversight, Accounting and Auditing Standards Authority(independent audit firm). ) are determined according to the examination to be made on the most up-to-date financial statements and apply to thebank with documents approved by these institutions In the 3-month period following the application date , cash commercial loans in TL can be extended, limited to the determined position gap .
• Companies whose FX cash assets do not exceed TL 15 million are required to have their current FX cash assets and their total assets and net sales revenue of the last 1 year determined by the independent audit firm according to the latest financial statementsas of the loan application date,FX cash assets throughout the term of the loan they will use . Within the first 10 working days of each month, in order for the companies to declare and undertake that the TL equivalent will not exceed 15 million TL, and to ensure that the said declaration and commitment is controlled by the bank they will be exempted from this application, provided that they send the current value of their FX cash assets, total assets and net sales revenue of the last 12 months as of the end of the previous month, to the bank .
• In calculating the TL equivalent of FX cash assets , the foreign exchange buying rate of the Central Bank of the Republic of Turkey for the calculation date will be used.
• Banks and financial institutions are not covered by this application. "Financial Institution" according to the Banking Law No. 5411; It means "institutions other than credit institutions established to carry out insurance , private pension or capital market activities or to carry out at least one of the fields of activity included in this Law, as well as development and investment banks and financial holding companies " .