Annual interest rate set by the Central Bank concerning late payments to the claimants for goods and services supply.

The debts arising from relationship among commercial enterprises with inconstant power balance between the related parties were seen to be used as a financing tool by being paid up late. The consequences of late debt payments for goods and services supply is arranged through Article 1530 within the Turkish Code of Commerce no.6102, aimed at protecting small and medium sized enterprises by preventing this unfair practice and ensuring compliance to the European Union ("EU") Directive no. 2000/35/EC.

The seventh sub-clause of the aforementioned article declares as "The interest rate to be applied at the circumstances that the default interest for late payments to the claimants is not provided within the contract or when the related provisions are considered invalid and the minimum compensation amount that could be demanded for expenses on collection of receivables are announced by the Central Bank of Turkish Republic in January of each year. The interest rate should be at least 8 % higher than the late fee to be applied over business transactions specified in the Law for Legal Interest and Default Interest dated 4/12/1984 and no. 3095". The implementation of the aforementioned provision is possible if only the claimant is a small or medium sized enterprise.

Within this context, pertaining to the Official Gazette dated 2 January 2017 through the seventh sub-clause of Article 1530 within the Turkish Code of Commerce, on goods and services supply, the interest rate to be applied at the circumstances that the default interest for late payments to the claimants is not provided within the contract or when the related provisions are considered invalid is defined at a rate of 10,75 % annually and the minimum compensation amount that could be demanded for expenses on collection of receivables is determined as 150,00 Turkish Liras by the Central Bank of Turkish Republic.

The announced rate and amount has been enacted as of their promulgation date to be effective as of 1 January 2017.

Our explanations provided above include general information on the issue. No responsibility can be claimed against    
EY and/or  Kuzey YMM ve Bağımsız Denetim A.Ş. due to the implications arising from the context of this document or emerging with respect to its context.


Best Regards,
Kuzey YMM ve Bağımsız Denetim  A.Ş.