Presidential Decree No: 85 introduced certain restrictions in the use of foreign currency in contracts by introducing new terms to the Decree No: 32 On Protection of the Value of the Turkish Lira.  Contracts which fall within the scope of the restrictions, however which have been denominated or indexed to foreign currency, are (subject to certain exceptions) to be converted to Turkish Lira.  One of the most frequently asked questions about implementation of the recent restrictions has been the stamp tax exposure on such conversion.  Ministry of Treasury and Finance has issued the Circular No. 22 on 22 November 2018 clarifying the stamp tax application for conversion of relevant contracts to Turkish Lira (“Circular No.22”).
According to newly issued Circular No.22, provided that the following conditions are met, the documents signed/executed for conversion to Turkish Lira are not subject to stamp tax:

• Other clauses of the agreements (such as parties, term, scope) are not amended and only the contract price is revised as required due to foreign currency restrictions in contracts.
• Upon the revision to be made the overall amount determined in Turkish Lira, is not higher than the amount in Turkish Lira to be determined by multiplying the foreign currency in the original version of the agreement by the foreign currency sale rate announced by the Republic of Turkey, Central Bank. 
• A reference is made to the initial agreement.  

If the first and last conditions above are met, however, the amount determined in Turkish Lira is higher than the amount determined by multiplying the foreign currency in the original version of the agreement by the foreign currency sale rate announced by the Republic of Turkey, Central Bank, then

• if the stamp tax for the original agreement is paid over the applicable ceiling amount, stamp tax will not accrue on the document signed for the conversion to Turkish Lira, or
• if the stamp tax paid for the original agreement is less than the applicable ceiling amount, then stamp tax will levy on the difference between the Turkish lira determined between the parties and by multiplying the foreign currency in the original version of the agreement by the foreign currency sale rate announced by the Republic of Turkey, Central Bank.

Stamp tax will levy on the documents/agreements in accordance with the general stamp tax rules, in case other clauses of the original agreement is amended or a new agreement replacing the original one is executed.