Business Law

Highlights of the “Economic Stability Shield Package” dated 18.03.2020

On 18.03.2019, with a package called the “Economic Stability Shield Package”, the Republic of Turkey Government has declared certain supports to the economy to deal with the COVID- 19 pandemic.

Measures implemented within this framework are as follows:

  • Postponement for 6 months the SSI premiums and the VAT stoppage of the months April, May and June for the sectors Retail, Shopping Mall, Iron-Steel, Automotive, Logistics-Transportation, Cinema-Theater, Accommodation, Food- Beverage, Textile-Garment and Event- Organization,
  • No accommodation tax until November,
  • Postponement of easement fees and revenue share payments of the months of April, May and June for hotel rentals for 6 months,
  • Reduction of the VAT rate from 18 percent to 1 percent for domestic air transport for 3 months,
  • Delay of the principal and interest payments of the companies whose cash flow have been deteriorated for at least 3 months due to the COVID-19 measures and additional financing support shall be given,
  • Inventory financing support to the exporter in order to maintain capacity utilization rates during the temporary deceleration in exports,

Postponement of the principal and interest payments of the loan payables to Halkbank for 3 months without interest for the merchants and craftsmen who declare that his business has been negatively affected,

  • Increase of the Credit Guarantee Fund limit from 25 billion liras to 50 billion liras, and it shall be provided to SMEs suffering of liquidity needs and collateral deficit as the priority of the loans is the ones negatively affected by the developments,
  • Encouragement of the introduction of credit packages for social purposes under favorable and advantageous conditions for the citizens,
  • Increase of the loanable amount from 80 percent to 90 percent in houses purchases under 500 thousand liras and reduction of the minimum down payment to 10 percent,
  • With the effect of the measures taken against the spread of the virus, it shall be ensured that firms which have defaulted in April, May and June will have a “force majeure” provision in their credit registry,
  • Postponement of the periods of concise declarations containing the payments of the deductions made at the source such as withholding tax for 3 months,
  • Continuation of the minimum wage support,
  • The flexible and remote teleworking models in our legislation shall be made more effective,
  • Implementation of the Short Work Allowance, facilitation and speed up the processes required to benefit from it. Thus, while providing temporary income support to the workers in the workplaces that their activities are interrupted, the cost of the employers will be reduced,
  • Increase of the lowest pension to 1,500 Turkish Lira,
  • Holiday bonus of retirees shall be paid at the beginning of April. Again, salary promotion payments shall be deposited directly into their accounts, without having to go to the Banks,
  • An additional 2 billion TRY for the financial aid to families in need according to the criteria set by the Ministry of Family, Labor and Social Policies,
  • In order to ensure continuity in employment, increase of the 2-month compensation period to 4 months,
  • Development of alternative channels according to the priorities we have determined both in production and retail in case of disruption in global supply chains,
  • For the elderly over 80 years old living alone, launching a periodic follow-up program of social and home health services.

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