ERDEM-NEWSLETTER-2018-metin

365 MISCELLANEOUS fees, costs or conditions, or producing a trading volume in violation of the conformity with market practices and comparability to similar transactions, prudence, and honesty principles of commercial life. In such cases, under the CML, there is the risk that loans granted interest-free to direct or indirect related parties, in other words, which are not in conformity with market practices and prudence, and honesty principles of commercial life, to be deemed as illegal transfer pricing activities. Law on Financing Companies Law on Financing Companies has abolished Decree Law on Lending No. 90 (“Decree No. 90”). The expression stated under Article 2/2 of Decree No. 90 as “Banks, insurance companies and other institutions which are autho- rized to lend money under other laws, and lending transactions of legal entities to other legal entities, which they have direct, or through their affiliates, indirect, shareholding relation…are not subject to this De- cree Law,” had been evaluated as intragroup loans are allowed. As such expression included in Decree Law No. 90 is not included in the Financing Companies Law, and such evaluation is eliminated. Turkish Commercial Code Article 358 of Turkish Commercial Code No. 6102 (“TCC”), regulates loans granted to affiliated persons and group companies. Pursuant to Article 358 of the TCC, shareholders cannot be granted loans by the company, unless they have paid their due obliga- tions arising from their capital subscription and profit of the company and, together with its surplus legal reserves, are sufficient to cover its previous year’s loss. Under the TCC, there is no prohibition on lending money except by a company that has insufficient means to cover its losses to its shareholders, and which has not fulfilled its capital subscription.