Turkey: Status Of Bitcoin Towards Legal Statue

Last Updated: 12 September 2018
Article by Yunus Elmas

Along with the rise of e-commerce and technological developments, one of the currencies, used through new payment systems and increasingly popular, is Bitcoin as a cryptocurrency. In this article, the status of Bitcoin according to the legal statute of Turkey has reviewed..

I- PAYMENT INSTRUMENTS WITHIN THE SCOPE OF FINANCIAL CRIMES INVESTIGATION BOARD ("FCIB"), BANKING REGULATION AND SUPERVISION AGENCY ("BRSA") AND CAPITAL MARKETS BOARD OF TURKEY ("CMBT") LEGISLATION

As is known, the use of Bitcoin become a system used for committing money laundering crimes; despite this, there is no prohibitive regulation concerning the use of Bitcoin and/or the payment with Bitcoin. According to Turkish Penal Code provision on 'laundering of assets acquired from an offense', there will be no liability of company accepted payment with Bitcoin, on condition of not to be aware of 'money laundering' character of that Bitcoin used in the payment.

According to Suspicious Transaction Reports Guide published by FCIB, in the case that Bitcoin purchase of any bank customer from a Bitcoin seller financial intermediary, the relevant bank shall report the transaction to FCIB for investigation of that transaction.

Only assessment of BRSA regarding Bitcoin is press statement dated 25 November 2013 and numbered 2013/32.1 And BRSA declared that Bitcoin is not electronic money with the justification of its structure and process, and also its probable risks are brought to the public attention. Bitcoin, as being a cryptocurrency type, is not regulated in BRSA regulations and it is obvious that there is a legal gap in that respect.

According to the report of research dated December 2016 published by CMBT2, CMBT gave a positive opinion aspect of expediting Turkey's legislative efforts regarding Bitcoin and involvement in the market by making basic arrangements. In our opinion, even though this report is issued just as a research report, it constitutes a presumption in the direction of the positive steps will be taken in Turkey by legal authorities related to the cryptocurrency regulation and taxation, in the coming period.

II- PAYMENT INSTRUMENTS AND BITCOIN WITHIN THE SCOPE OF FISCAL LEGISLATION

There is a problem in recording Bitcoin on financial books due to the fact that the Central Bank does not have a exchange published in terms of foreign currency collections and payments for Bitcoin. Also, it is a separate problem that the bitcoin value is excessively volatile.

1. Bitcoin in terms of Tax Procedure Law ("TPL") numbered 213

The issue of how Bitcoin will be subject to valuation is uncertain, and the reason is that the legislative infrastructure for Bitcoin has not yet been established in our legislation. Currently, since Bitcoin does not comply with the definitions and regulations in the legislation, Bitcoin cannot be regarded as a cash deposit, foreign currency, securities, or a commodity.

In the circumstances, Bitcoin, which is held in assets of a commercial entity, can be assessed with 'if there is, its fair value, if not, its carrying value, if not, its precedent value' according to Article 289 of the TPL headed 'Special Circumstances'. Due to that, there is no foreign currency stock exchange in Turkey to determine fair value, Bitcoin assesses with its carrying value ( it means that the calculation value identified in the accounting records) which is second place in the article. For this reason, there is no need for an assessment at the end of the period, even if Bitcoin's market buying-selling value increases or decreases.

2. Bitcoin in terms of Value Added Tax ("VAT") Law numbered 3065

According to the VAT Law, currency and money transfer exempt from VAT. It may be considered that the transfer of Bitcoin, which is a payment instrument such as currency and money in terms of its essence and function, may also be exempted from VAT in the light of this article of the VAT Law. There is essentially a purchase power transaction with Bitcoin's transaction. Therefore, it will not be possible to accept the existence of a goods delivery or service performance, and it can be assessed not to be subject to VAT. As a matter of fact, in some advance rulings of the Presidency of the Istanbul Tax Office, the transaction of the passwords substituted for money and developed for the purpose of safe shopping on the internet is not subjected to VAT in a similar manner.

CONCLUSION

In the light of all this information, when the Bitcoin system is evaluated in terms of Turkey, there is not any legal regulation recognizing, prohibiting or confirming the use of the Bitcoin system. Additionally, because of that there is not any issued exchange, it is not known how to record on financial books. As a result of that, because a legal gap comes to exist on that issue, there are some risky points regarding the use of Bitcoin as a payment instrument. As a consequence, the company that will accept payments by Bitcoin should pay attention to the following issues;

1) Opinion from BRSA

2) Advance ruling to be examined in terms of accounting and tax legislation

3) Required technical and administrative antifraud measures for the system not to be used as a tool for money laundering offense under FCIB legislation.

are must be taken.

Footnotes

1 https://www.bddk.org.tr/WebSitesi/turkce/Duyurular/Basin_Aciklamalari/12574bitcoin_hk_basin_aciklamasi.pdf

2 http://www.spk.gov.tr/yayingoster.aspx?yid=1130&ct=f&action=displayfile

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions