EN 
TR 
On April 17, 2020 a new provisional article was added to Turkish Commercial Code numbered 6102 (“TCC”) regarding the prohibition of dividend distribution for capital companies (excluding public legal entities and their affiliates) for the portion exceeding twenty-five percent of the net profit for the fiscal year 2019 until September 30, 2020. As per the Communique published on the official gazette No.31130 dated May 17, 2020 regarding the procedures and principles to be applied on such limitation, the general assembly shall not authorize the board of directors of the company for such distribution exceeding twenty-five percent of the net profit of the year 2019 and cannot resolve on to distribute previous years’ profits and free reserves. However, this restriction is not applicable on capital increase through internal resources.
In case the general assembly has already resolved to distribute dividends for the fiscal year 2019, however the shareholders have not been fully or partially paid yet, the payments for the portion exceeding twenty-five percent of the net profit for 2019 will be postponed until the end of September 30, 2020 and interest will not accrued to deferred payments. Further, if the board of directors is authorized to distribute advance dividends by the general assembly, advance payments are postponed until the end of September 30, 2020.
The companies exempted from this rule are as follows:
i. Companies that resolved to distribute dividends of 120,000.00 TRY or less (excluding employers of those who benefited from cash wage support as per the provisional article 24 of Law No. 4447 and short-time working allowance or unpaid leave due to COVID-19, and those who still use credit collaterals subsidized by the State Treasury and still have an unpaid credit debt balance),
ii. Companies decided to distribute dividends, provided that more than half of the dividend decided to be distributed by the shareholders which is used in cash and single payment of the capital commitment debt to another capital company,
iii. Companies that have decided to distribute dividends, provided that the dividend decided to be distributed by the shareholders is used in the execution of the liabilities that have become due until the end of September 30, 2020 within the scope of the credit agreements or project financing agreements (payments related to the amount exceeding the shareholders' obligations are postponed until September 30, 2020).
In order to discuss the distribution of profits to be made within the scope of the exception, the opinion of the Ministry of Commerce is required. In the applications to be made for the opinion of the Ministry, the notarized copy of the decision of the board of directors, the financial statement of the company for the fiscal period and the statement of profit or loss and the certification of the companies obtained from the relevant institutions that they are within the scope of the exemption should be submitted.
In calculating the dividends; financial statements prepared by those who have to prepare their financial statements in accordance with the standards determined by the Public Supervision, Accounting and Auditing Standards Authority in accordance with Article 88 of TCC and others, financial statements prepared by the Tax Procedure Law will be taken as a basis. The dividend amount to be distributed shall not exceed the total amount of resources subject to dividend distribution in the records kept as per the Tax Procedure Law.
Deniz Çelikkaya
