|Tolga Çabakli||Isil Ökten|
Upon a further amendment in November 2014, it was been made clear that this provision does not apply to the banks or leasing, factoring and financing institutions, but only to Turkish companies. Despite the lack of any official guidance on this issue, it's understood that the underlying reason behind the change is CBT's intention to ensure that each loan is properly recorded, and to identify the term of each loan so that the applicable taxes can be calculated accordingly. More specifically, the intention of this legislation is to come up with a loan agreement or similar document evidencing each drawdown under a revolving facility agreement. Further, if the Turkish Borrower reaches the total limit specified in the revolving facility, this agreement would be deemed to have been exhausted, and a new credit limit should be opened through a new loan agreement. Each and every loan agreement, including those evidencing the drawdown, should be reported by the intermediary Turkish bank to the CBT. The amendment would prevent the foreign re-borrowings (in respect of the repaid loans) made under a revolving facility exceeding the limit initially agreed and notified to the CBT even if certain portion of such loan is repaid.
To the extent this is properly documented, so that the CBT can follow the amount and t term of each drawdown under the revolving facility, this should not be considered breaching the above legislation.
Tolga Çabakli and Isil Ökten