Recent Development
The practice limiting the impact of certain foreign exchange losses and expenses in the assessment of companies’ capital structures has been extended until 1 January 2028 for an additional year pursuant to the Communiqué Amending the Communiqué on the Procedures and Principles Regarding the Implementation of Article 376 of the Turkish Commercial Code No. 6102 (the “Communiqué”), which was published in the Official Gazette dated 10 October 2026 and numbered 33396, and entered into force on the same date.
What’s New?
Pursuant to the recently published Communiqué, the exemption allowing companies, for the purposes of technical bankruptcy and negative equity assessments under Article 376 of the Turkish Commercial Code, to exclude the exchange difference expenses arising from unfulfilled foreign currency obligations, as well as half of the sum of expenses arising from leases, amortizations and personnel expenses accrued in 2020 and 2021, has been extended until 1 January 2028. Prior to this amendment, this provision would remain valid only until January 1, 2027.
Please see our legal alert providing a detailed overview of capital loss or technical insolvency in detail here, as well as our legal alert regarding the changes on the practice dated December 29, 2020 here.
Conclusion
The amendment ensures the continuation of the practice that supports companies in the assessment of their capital and equity position by allowing certain foreign exchange losses and expenses to be excluded. In this context, it is important for companies to act in accordance with the procedures and principles applicable to cases of capital loss or technical insolvency and to closely monitor relevant legislative developments.
