Amendment to the Communiqué on Article 376 of the TCC

Through the Communiqué on the Amendment Regarding the Communiqué on the Procedures and Principles Regarding the Application of Article 376 of the Turkish Commercial Code No. 6102 (Communiqué) published in the Official Gazette dated December 25th, 2024 and No. 32763, essential amendments are introduced for the calculation method of technical insolvency & bankruptcy.

Accordingly, (i) all foreign exchange losses arising from the foreign currency obligation and (ii) half of the total expenses arising from rents, amortizations, and expenses of employees accrued by 2020 and 2021 may be disregarded during the calculations made for the determination of technical insolvency and/or bankruptcy situations until January 1st, 2026. The former application period was until January 1st, 2025. 

At this point, we would like to emphasize that the determinations to be made within the scope of Article 376 of the TCC are important in terms of (i) the responsibility of the company’s board of directors, (ii) the calculation of capital movements to be carried out within companies (such as capital increase/decrease/simultaneous decrease-increase/simultaneous increase-decrease), (iii) the determination of the payment obligation to occur before the registration application. The aforementioned findings will also be important for the planning of potential tax-free mergers and partial/full spin-off transactions. The tax implications of each transaction will need to be carefully considered. 

The Communiqué enters into force on the date of its publication.