Similar to previous years, as we approach the year end, we would like to draw your attention to the requirements for the annual certification of company commercial books.
In accordance with requirements of the Tax Procedure Law and Turkish Code of Commerce, the commencement certification of the following books kept physically by the commercial companies established in Turkey, shall be affected by a notary public until the end of the month preceding the company's next activity year.
- General Journal,
- General Ledger,
- Inventory Book,
- Share Ledger,
- Minutes Book for Resolutions of Board of Directors,
- Minutes Book for General Assembly Meetings
That means that, for those companies whose accounting period coincides with the calendar year, the commercial books to be used in year 2019 should be certified by a notary public until close of business on 31 December 2018, the last working day of the year. At this juncture, we would like to point out that although there is a new process where certification of company commercial books can be affected by the trade registries, this is applicable only during the establishment and registration of the relevant company. Therefore please be aware that companies are still required to certify their commercial books before the notaries. Here, we would also like to point out that despite diverse practices until now, the Turkish Association of Notaries in their Circular no.22 dated 16.11.2018 has emphasized that the previous company books themselves or (in case these books have been lost) the duly issued loss certificates will also need to be submitted during the certification of new company books, be it at the year end, or when they run out of pages.
However the share ledger and the minutes book for general assembly meetings currently used by the company may continue to be used in the succeeding activity periods without any commencement certification, as long as they have sufficient number of blank pages.
Pursuant to the provisions of Turkish Commercial Code, closing certification is needed only for the general journal and the minutes book for board resolutions. Closing certification for general journals may be obtained from a notary public until the end of the sixth month in the succeeding activity period (until 28 June 2019 for the taxpayers whose accounting period coincides with the calendar year) and closing certification for the book of board resolutions may be obtained until the end of first month in the succeeding activity period (until 31 January 2019 for the taxpayers whose accounting period coincides with the calendar year).
For the minutes book of board of directors' resolutions, general journal, inventory book and general ledger, companies who wish to continue to use the same books in the following year may obtain interim approval from the notary public during the first month of the new accounting period (until 31 January 2019 for the taxpayers whose accounting period coincides with the calendar year) provided that such books have sufficient number of blank pages. In such cases, there will be no need to repeat the commencement and closing certification procedures.
Last but not least, we would kindly like to remind you that failure to obtain commencement and closing certifications for the company's commercial books is subject to an irregularity fine pursuant to Article 352 of the Tax Procedure Law and also an administrative fine as per Article 562 of the Turkish Commercial Code. Furthermore, please also note that as per Article 222 of Turkish Code of Civil Procedure, unless the company's commercial books were duly certified, recorded and maintained in compliance with the relevant laws, these books would not be deemed as acceptable evidence for the company in case of a dispute.
21 December 2018
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.