Inflation Accounting in Turkey: TMS 29 Restatement, Tax Books under Tax Procedure Law Article 298 and Law No. 7571, Dividends, Capital Increases and Capital Loss in Listed Companies

Turkish listed companies and other entities that apply Turkish Financial Reporting Standards, subject to sector exceptions such as banks, have presented inflation-adjusted financial statements under TMS 29 since annual periods ending on or after 31 December 2023. TMS 29 is the Turkish text of IAS 29. The obligation follows the announcement of the Public Oversight, Accounting and Auditing Standards Authority (KGK) of 23 November 2023 and Capital Markets Board (SPK) decision 81/1820 of 28 December 2023. The tax books follow a separate regime. The Tax Procedure Law requires inflation adjustment when the producer price index has risen by more than 100% over the last three periods and by more than 10% in the current period (Law No. 213, repeated Art. 298(A)(1)). Provisional Art. 33 suspended that adjustment until the 31 December 2023 balance sheet. Provisional Art. 37, added by Law No. 7571 in December 2025, suspends it again for the 2025, 2026 and 2027 periods. Dividends, capital increases from internal resources and the capital loss test of Commercial Code Art. 376 must therefore be read against two sets of figures. Under SPK rules, a dividend must have a counterpart in the statutory records. A capital increase from internal resources uses the lower of the two sets of figures (Share Communiqué VII-128.1 Art. 16(1)). This guide explains these rules for foreign institutional investors. It reflects the legislation in force as at 26 October 2026.

Why inflation accounting matters for investors in 2026

Since the 2023 year-end, the financial statements that Turkish listed companies publish on the Public Disclosure Platform (KAP) have been restated for inflation under TMS 29. Restatement changes reported profit, equity, asset values and ratios, sometimes substantially. Investors affected by the 2026 fund and market manipulation cases read these figures in many settings. They support damages calculations and claims that disclosures were misleading. They are also the basis on which dividend proposals, capital increases and the solvency of companies and bond issuers are assessed.

The restated figures are not the only figures. Every Turkish company also keeps statutory books, which are the basis for tax and for several company-law consequences. Inflation adjustment of those books is governed by the Tax Procedure Law, which has followed its own timetable: an adjustment of the 31 December 2023 balance sheet, followed by a suspension for 2025, 2026 and 2027 under Law No. 7571. As a result, the same company can show materially different profit and equity figures in its restated statements and in its statutory books.

This guide explains the legal rules that connect the two sets of figures. It covers what TMS 29 requires and who applies it, the tax-side regime, and how dividends, capital increases and the capital loss test are calculated. It also covers who is responsible for the statements and which remedies investors have. Accounting judgements under the standard are matters for preparers and auditors. This guide addresses the legal framework within which those judgements produce consequences for shareholders and creditors.

The legal framework

TMS 29 in brief: what restatement does

Turkish Accounting Standards are set exclusively by the KGK, in line with international standards (Commercial Code Art. 88(2)). Entities within the scope of the bookkeeping provisions must comply with them when preparing individual and consolidated financial statements, while the Commercial Code’s rules on financial statements and reserves remain reserved (Art. 88(1)). The annual financial statements of a joint stock company must give a true and fair view under those standards (Art. 515). TMS 29 is the standard that applies when the functional currency is that of a hyperinflationary economy.

The core requirement is that the financial statements are stated in terms of the measuring unit current at the end of the reporting period (TMS 29 para. 8). In practice, this has five main effects:

1. 1. Monetary items are not restated, because they are already expressed in current money. These are cash and receivables and payables fixed in Turkish lira.
2. 2. Non-monetary items are restated by applying the change in a general price index from the date of acquisition or contribution. Examples are property, plant and equipment, inventories, and investments carried at cost.
3. 3. Income and expenses are restated from the dates on which they were first recorded. Depreciation and cost of sales follow the restated carrying amounts.
4. 4. The gain or loss on the net monetary position is recognised in profit or loss. An entity with more monetary liabilities than monetary assets generally reports a monetary gain, and an entity holding net monetary assets generally reports a monetary loss.
5. 5. Comparative figures are restated into the same current measuring unit, so last year’s figures shown in this year’s statements differ from those originally published.

Equity is restated as well. In Turkish practice, the restatement of paid-in capital is shown in a separate “capital adjustment differences” line. Reserves are tracked at restated amounts, and differences between the restated amounts and the statutory amounts are presented within retained earnings and explained in the notes. This presentation was confirmed by the SPK’s March 2024 decision for issuers.

The standard requires a general price index that reflects changes in general purchasing power. It is preferable that all entities reporting in the currency of the same economy use the same index (TMS 29 para. 37). Whether an economy is hyperinflationary is a matter of judgement by reference to indicators. One indicator is that the cumulative inflation rate over three years approaches or exceeds 100% (para. 3). When an economy ceases to be hyperinflationary, entities stop applying the standard. The amounts expressed in the measuring unit current at the end of the previous reporting period become the carrying amounts in later statements (para. 38).

Who applies TMS 29, and from when

The KGK announcement. On 23 November 2023 the KGK announced that entities applying Turkish Financial Reporting Standards must present their financial statements adjusted for inflation under TMS 29 for annual reporting periods ending on or after 31 December 2023. The same applies to entities using the framework for large and medium-sized entities (BOBİ FRS) under its Section 25. The announcement also allowed institutions with regulatory and supervisory powers in their own fields to set different transition dates. Sector regulators have used that latitude.

Issuers and capital market institutions. An issuer must prepare its public financial statements in accordance with regulations the SPK sets within the framework of Turkish Accounting Standards (Capital Markets Law Art. 14(1)). Communiqué II-14.1 requires these entities to apply the TMS/TFRS published by the KGK. It also allows the SPK to take implementing decisions, which these entities must follow (Art. 5(1)–(2)).

By decision 81/1820 of 28 December 2023, the SPK required issuers and capital market institutions that apply TMS/TFRS to apply TMS 29 from annual financial reports for periods ending on 31 December 2023. By decision 14/382 of 7 March 2024, announced in Bulletin 2024/14, it issued implementing rules. These cover the presentation of equity items, profit distribution, offsetting of losses and capital increases. For the 2023 statements only, the decision allowed the board and financial reporting executives to share non-restated information with analysts and investors. The information could not amount to full financial statements, the disclosure had to state its basis and whether it had been audited, and any special disclosure had to be made on KAP. The same decision provided that investment funds do not apply inflation accounting.

Interim reports. Listed issuers prepare interim financial reports for the three, six and nine-month periods under the same standards. Disclosures on KAP show that restated figures continued to be used in 2026 interim reporting (Communiqué II-14.1 Arts. 5, 7 and 11).

Banks and other financial institutions. The banking regulator (BDDK) has set its own timetable for the institutions it supervises. By decision No. 11021 of 5 December 2024, it decided that banks and financial leasing, factoring, financing, savings finance and asset management companies would not apply inflation accounting in 2025. Later periods depend on its later decisions, which should be checked for the period concerned. The financial statements of a listed bank may therefore not be comparable on this point with those of a listed industrial company.

Investment funds. Because investment funds do not apply inflation accounting, their unit prices and reported returns are nominal. This matters when fund performance is compared with restated company results, a comparison that arises in the 2026 fund cases. Fund rules are explained in our guide to Turkish investment fund rules.

The tax books: Tax Procedure Law Article 298 and its suspensions

The conditions. Income and corporate taxpayers that determine their profits on the balance-sheet basis must adjust their financial statements for inflation when two conditions are both met. The price index must have risen by more than 100% over the last three accounting periods, including the current one, and by more than 10% in the current period. The adjustment ends when the two conditions are no longer met together. For provisional tax periods, the previous thirty-six months and the last twelve months are used instead (Tax Procedure Law, repeated Art. 298(A)(1)). The President may lower the 100% threshold to 35% and raise the 10% threshold to 25%, and may restore either to its statutory level.

The index. For tax purposes, the price index is the producer price index calculated by the Turkish Statistical Institute for Turkey as a whole (Art. 298(A)(2)(f)). Foreign currencies are treated as monetary items (Art. 298(A)(2)(b)). The tax adjustment can therefore rely on a different index from the general price index used under TMS 29.

Equity restatement differences. Inflation differences on liability-side items are taxed in the period in which they are transferred to another account or withdrawn from the business. Inflation differences on equity items may, however, be offset against prior-year losses arising from the adjustment, or added to capital by corporate taxpayers, and these steps are not treated as a profit distribution (Art. 298(A)(5)).

Provisional Article 33. Law No. 7352 of 20 January 2022 suspended the tax adjustment for the 2022 accounting period and the provisional tax periods of 2023, whether or not the conditions were met. The 31 December 2023 financial statements were adjusted regardless of the conditions. The resulting difference was shown in prior-year profit or loss. A prior-year profit so arising is not taxed, and a prior-year loss so arising is not accepted as a loss. A fourth paragraph, added by Law No. 7491 in December 2023, covers banks and other named financial institutions. These are companies under Law No. 6361, payment and electronic money institutions, authorised foreign exchange houses, asset management companies, capital market institutions, insurance, reinsurance and pension companies. The paragraph also covers companies in liquidation or bankruptcy and state economic enterprises. For all of them, the profit or loss difference from adjustment in the 2024 and 2025 periods is disregarded in computing taxable profit.

Provisional Article 37. Law No. 7571 of 24 December 2025 added a new suspension. Financial statements are not adjusted for the 2025 accounting period, or for the 2026 and 2027 periods including their provisional tax periods, whether or not the conditions are met. For taxpayers with special accounting periods, the suspension covers periods ending in 2026, 2027 and 2028. The President may extend it by up to three further periods. The suspended periods count as periods in which the conditions are not met for the revaluation regime described below. The article also applies to taxpayers within Provisional Art. 33(4). It does not apply to taxpayers dealing exclusively in gold and silver, who adjust regardless of the conditions under Art. 298(A)(9).

Revaluation instead of adjustment. In periods in which the adjustment conditions are not met, full taxpayers keeping books on the balance-sheet basis may revalue their depreciable assets and the related accumulated depreciation under Art. 298(Ç), added by Law No. 7338 in 2021. For investments in progress, adjustment differences are kept in a special fund under Art. 298(A)(10), added by Law No. 7529 in 2024. They are brought into taxable profit in equal instalments over the period in which the asset is activated and the following four periods.

Two sets of figures: where they diverge

A listed company publishes TMS 29 statements on KAP, prepared under the Commercial Code and the Capital Markets Law. It also keeps statutory books under the Tax Procedure Law. After the adjustment of the 31 December 2023 balance sheet, the ordinary conditions governed 2024, and the statutory books are not adjusted for 2025 to 2027. The TMS 29 statements, by contrast, are restated each period. The gap between the two can grow from year to year. It shows in the carrying amounts of fixed assets and inventories, in depreciation and cost of sales, in the equity components and in reported profit.

Restatement under TMS 29 can turn a nominal profit into a loss. This happens where restated depreciation and cost of sales are high and monetary assets lose value. It can also do the reverse, where a company carries large net monetary liabilities in lira. Statutory profit follows its own rules. Neither figure is the “true” one for every purpose. The law assigns each set of figures a role, and that role determines which figure governs a given question.

Dividends: distributable profit with two sets of books

Commercial Code rules. Each shareholder may share, in proportion to its shares, in the net profit that is to be distributed under the law and the articles. The Capital Markets Law and its regulations are reserved (Commercial Code Art. 507(1) and (3)). Annual profit is determined by the annual balance sheet (Art. 508(2)). Dividends may be paid only from net profit for the period and from free reserves (Art. 509(2)). Five per cent of annual profit must be allocated to the general legal reserve until it reaches twenty per cent of paid-in capital. Further amounts are added once that limit is reached, including ten per cent of the total distributed after a first dividend of five per cent (Art. 519(1)–(2)). No dividend can be set until the legal reserves, and the reserves required by the articles, have been allocated (Art. 523(1)).

Capital markets rules. Public companies distribute profit under a dividend policy set by the general meeting (Capital Markets Law Art. 19(1); Communiqué II-19.1 Art. 4(1)). Any change to that policy must be disclosed with the board’s reasons (Art. 4(3)). The board’s proposal and the dividend distribution table must be published on KAP no later than the date on which the agenda of the ordinary general meeting is announced (Art. 8(1)). The SPK’s dividend distribution table has columns for both the SPK-basis statements and the statutory records. Prior years’ losses are deducted in calculating net distributable profit, to the extent they exceed the sum of three items: prior years’ profits, the general legal reserve including share premiums, and amounts arising from the inflation restatement of equity items other than capital (Art. 11). The SPK publishes and updates a dividend guide on the sources that may be distributed (Art. 13).

The SPK’s inflation accounting rules on dividends. Under the SPK’s March 2024 decision, the distributable amount must have a counterpart in the distributable profit items of the statutory records. The board is responsible for checking this and for making the corresponding entries in those records. The decision also addressed the offsetting of accumulated losses that arose on first restatement against current profit, retained earnings, extraordinary reserves and legal reserves including share premiums. Where such offsetting is not made, or is made only in part, the board must explain this to the general meeting. In practical terms, a restated profit that is not matched in the statutory records cannot be paid out. A statutory profit that is wiped out by restated prior losses may also be reduced in the SPK-basis calculation.

Dividend advances. Listed companies may pay cash dividend advances from profits in their interim financial statements. This requires a provision in the articles and an authorisation of the board by the general meeting, limited to the relevant accounting period (Communiqué II-19.1 Art. 9(1)–(2)). The advance may not exceed half of the interim net profit after the required reserves and prior-year losses. The total for a period is capped at the lower of two amounts: half of the previous year’s net profit, and the other distributable sources in the interim statements, excluding the interim net profit (Art. 10(1)–(2); Capital Markets Law Art. 20(1)). Board members, and auditors within the limits of their reports, are liable for loss caused by an incorrect advance resulting from interim statements that do not give a true and fair view. Shareholders and board members may bring an action to annul the board’s decision within thirty days of its announcement (Art. 20(2)).

Recovery. Shareholders who received dividends unjustifiably and in bad faith must repay them. The claim is time-barred five years after receipt (Commercial Code Art. 512). Our guide to dividends in Turkish listed companies explains the general rules in more detail.

Capital increases and equity restatement differences

Internal resources. A company may increase its capital from internal resources. These are reserves set aside under the articles or by the general meeting and not tied to a specific purpose, the freely usable parts of the legal reserves, and funds that legislation allows to be added to capital (Commercial Code Art. 462(1)). The existence of the amount must be confirmed by the approved annual balance sheet and a written declaration of the board. If more than six months have passed since the balance sheet date, a new balance sheet is required (Art. 462(2)). In public companies, bonus shares are distributed to the shares existing at the date of the increase (Capital Markets Law Art. 19(4)).

The lower of two figures. For public companies, internal resources in the SPK-basis statements can be added to capital only if they also have a counterpart in the statutory books and records. The check is made on the total internal resources in each. Where the two totals differ, the lower one is used (Share Communiqué VII-128.1 Art. 16(1)). Fair value gains reported in equity, interim period profits and funds that legislation does not allow to be capitalised cannot be added to capital (Art. 16(2)). Prior-year losses must be dealt with first. A public company cannot increase capital from internal resources until the lower of two figures has been offset against internal resources: the prior-year losses in its statutory records, or those in its last published SPK-basis statements. Alternatively, the board may submit to the SPK a resolution that the losses will be offset at the general meeting (Art. 16(3)).

Restatement differences. Under the SPK’s March 2024 decision, positive capital adjustment differences and other inflation differences on equity items may be added to capital. First-time restatement differences arising from retained earnings and from reserves not restricted from distribution may be added to capital or distributed, subject to the law and the tax rules. On the tax side, adding equity inflation differences to capital is not a profit distribution. Transferring them to another account or withdrawing them is taxed in the period concerned (Tax Procedure Law, repeated Art. 298(A)(5)).

Challenges. In the registered capital system, the board may increase capital up to the ceiling in the articles. Board members, or shareholders whose rights are infringed, may bring an action to annul the board’s decision within thirty days of its announcement (Capital Markets Law Art. 18(6)). Rights issues and dilution are discussed in our guide to capital increases and pre-emption rights.

Capital loss and over-indebtedness under Commercial Code Article 376

The thresholds. If the last annual balance sheet shows that half of the total of capital and legal reserves is lost, the board must immediately call a general meeting and propose remedial measures. If two thirds are lost, the company is dissolved by operation of law, unless the general meeting decides to make do with one third of the capital or to replenish the capital. Where there are signs of over-indebtedness, the board must prepare an interim balance sheet on both a going-concern basis and likely sale values. If assets do not cover creditors’ claims, the board must notify the commercial court and request bankruptcy, unless qualifying creditors subordinate their claims (Commercial Code Art. 376(1)–(3)).

The Communiqué. The Ministry of Trade’s Communiqué sets out the procedure. A loss of at least half but less than two thirds requires remedial measures to be put to the general meeting, together with a clear explanation of the company’s financial position (Arts. 5–6). A loss of two thirds or more requires the general meeting to choose one of three measures: a capital reduction, replenishment of capital, or a capital increase. Without one of them, the company is dissolved (Arts. 7–11). Signs of over-indebtedness may appear in annual or interim financial statements, audit reports, early risk detection committee reports or the board’s own findings (Art. 12(2)).

Which statements. Capital loss and over-indebtedness are determined on the basis of the financial statements prepared under Commercial Code Art. 88. Where Turkish Accounting Standards are applied voluntarily, the statements so prepared are used (Communiqué Art. 13). Restatement changes both sides of the test: the restated capital and reserves, and the losses measured against them. For a listed company, which set of figures governs should be determined from the company’s own reporting obligations. The board should be able to explain its choice.

Temporary exclusions. Under Provisional Art. 1 of the Communiqué, as most recently amended in October 2026, two items may be disregarded until 1 January 2028. The first is all foreign exchange losses on foreign currency liabilities not yet performed. The second is half of the total of lease expenses, depreciation and personnel expenses accrued in 2020 and 2021. No entries are made in the financial statements for these exclusions; they are disclosed in the notes for information. For creditors and bondholders, these rules affect when the protective duties under Art. 376 are triggered. Insolvency routes are explained in our guide to insolvency, concordat and bankruptcy claims.

Responsibility for restated statements and investor remedies

Who is responsible. The issuer and, according to their fault and the circumstances, its board members are responsible for preparing and presenting the financial statements in accordance with SPK rules, and for their truth and accuracy. The board must adopt a separate resolution approving them. Announcements must include statements by the responsible board members and executives on the truth and accuracy of the statements (Capital Markets Law Art. 14(2); Communiqué II-14.1 Art. 9(1)–(3)). The statements specified by the SPK must be independently audited under Turkish Auditing Standards (Capital Markets Law Art. 14(3)).

Deadlines. Listed companies file annual reports with the audit report within sixty days of the period end, or seventy days where consolidated statements are prepared. For public companies, filing must be at least three weeks before the general meeting and in any case by the end of the third month (Communiqué II-14.1 Art. 10). Interim reports are filed within thirty or forty days. Ten days are added for listed companies where the interim statements are subject to a limited review (Art. 11). Reports must be published on the company’s website and kept available for at least five years (Art. 14).

Civil liability. Board members are liable for loss caused by culpable breach of their duties under the law and the articles (Commercial Code Art. 553). Auditors are liable to the company, its shareholders and its creditors for loss caused by fault in their statutory duties (Art. 554). For loss to the company, shareholders may claim, but only for payment to the company (Art. 555(1)). Prospectus liability follows the Capital Markets Law (Art. 10). These routes are discussed in our guides to directors’ and auditors’ liability and financial reporting fraud and audit failures.

Criminal liability. Intentionally preparing financial statements and reports that do not reflect the truth, opening fictitious accounts, or making any kind of accounting fraud in the records is punished under the Criminal Code. Preparing false or misleading independent audit and valuation reports is also punished, as are the responsible board members or executives of the issuer who procure them (Capital Markets Law Art. 112(2)). A difference of view on an accounting judgement under TMS 29 is not, by itself, an offence. Liability requires intent or fault, loss and causation, each of which must be proven, and the presumption of innocence applies.

Shareholder tools. The financial statements, the annual report, the audit reports and the board’s dividend proposal must be available for inspection at least fifteen days before the general meeting. At the meeting, shareholders may ask the board about the company’s affairs and the auditors about the audit (Commercial Code Art. 437(1)–(2)). A shareholder may ask the general meeting for a special audit of specific events. If the meeting refuses, shareholders meeting the statutory thresholds may apply to the court (Arts. 438–439). Resolutions contrary to the law, the articles or good faith may be challenged within three months by the persons listed in Art. 446 (Art. 445). Our guide to shareholder rights in Turkish listed companies explains these steps.

Reading restated statements: practical points

• ▸ Compare like with like. Comparative figures in restated statements are expressed in the current measuring unit. They differ from the figures originally published for the earlier period, so the restated comparative should be used for trend analysis.
• ▸ Look at the monetary position line. The gain or loss on the net monetary position can dominate net profit. A company with large net lira liabilities may show a profit that is driven by inflation rather than by operations.
• ▸ Read the equity note. The notes show capital adjustment differences and the differences between restated and statutory reserves within retained earnings. These are the starting points for dividend and capital increase questions.
• ▸ Check the statutory column. The dividend distribution table shows the SPK-basis and statutory figures side by side. Where they differ widely, the lower capacity usually decides what can be paid.
• ▸ Identify the sector rules. Banks and other institutions supervised by the BDDK may follow a different timetable from industrial issuers. Investment funds do not apply inflation accounting at all.
• ▸ Mind the date of figures used in claims. A damages claim, a valuation or an expert report should state which set of figures and which measuring date it uses. Mixing restated and nominal figures is a common source of error. Damages are discussed in our guide to calculating damages in Turkish securities claims.
• ▸ Watch the audit report. Key audit matters and any qualification on the application of TMS 29 indicate where the auditor saw judgement or risk.

Points for foreign institutional investors

Ask for the reconciliation. Before the general meeting, the right to information under Commercial Code Art. 437 can be used to ask how the dividend proposal was matched against the statutory records. The same applies to how prior losses were offset and how internal resources for a bonus issue were measured. Answers given at the meeting must be careful and truthful.

Record dissent. A shareholder that wishes to challenge a resolution approving the financial statements or the dividend must, as a rule, attend, vote against and have its dissent recorded in the minutes (Commercial Code Art. 446(1)(a)). Foreign investors voting through custodians should give instructions in time. Proxy voting is discussed in our guide to voting in Turkish listed companies.

Watch the short deadlines. Actions to annul general meeting resolutions must be brought within three months (Commercial Code Art. 445). Actions against board decisions on dividend advances and on capital increases in the registered capital system must be brought within thirty days of announcement (Capital Markets Law Arts. 18(6) and 20(2)).

Own reporting. An investor that itself reports under IFRS and consolidates or equity-accounts a Turkish investee applies IAS 29 and IAS 21 in its own accounts. That is a matter for the investor’s auditors. It is still useful for its Turkish counsel to know which figures were used, so that positions taken in Turkish proceedings are consistent.

Tax on distributions. Dividend withholding and treaty relief are separate questions from inflation accounting. They are discussed in our guide to taxation of foreign institutional investors in Turkey.

Frequently asked questions

What is TMS 29?

It is the Turkish text of IAS 29, published by the KGK. It requires financial statements to be stated in the measuring unit current at the end of the reporting period (TMS 29 para. 8).

Since when do Turkish listed companies apply TMS 29?

From annual financial reports for periods ending on 31 December 2023, under SPK decision 81/1820 of 28 December 2023 and the KGK announcement of 23 November 2023.

Do investment funds restate their figures?

No. Under the SPK’s March 2024 decision, investment funds do not apply inflation accounting.

Do banks apply TMS 29?

The BDDK sets the timetable for banks. By decision No. 11021 of 5 December 2024, banks and certain other financial institutions did not apply inflation accounting in 2025; later periods follow later BDDK decisions.

When does the tax law require inflation adjustment?

When the producer price index has risen by more than 100% over the last three periods and by more than 10% in the current period (Tax Procedure Law, repeated Art. 298(A)(1)).

Is the tax adjustment suspended now?

Yes. Under Provisional Art. 37, added by Law No. 7571, there is no adjustment for the 2025, 2026 and 2027 periods, and the President may extend this by up to three periods.

Was the 31 December 2023 balance sheet adjusted for tax?

Yes, regardless of the conditions. The resulting difference went to prior-year profit or loss and had no tax effect (Provisional Art. 33).

Can restated profit be paid out as a dividend?

Only to the extent that it has a counterpart in the distributable items of the statutory records, under the SPK’s March 2024 decision.

How are prior losses treated for dividends?

Losses exceeding prior profits, the general legal reserve including share premiums and the inflation restatement of equity items other than capital are deducted (Communiqué II-19.1 Art. 11).

Which figure is used for a bonus issue?

The lower of the internal resources in the SPK-basis statements and in the statutory records (Share Communiqué VII-128.1 Art. 16(1)).

Is adding inflation differences to capital taxed?

No. Adding equity inflation differences to capital is not a profit distribution, but transferring them elsewhere or withdrawing them is taxed (repeated Art. 298(A)(5)).

Which statements decide capital loss under Article 376?

Those prepared under Commercial Code Art. 88, or those prepared under Turkish Accounting Standards where these are applied voluntarily (Communiqué on Art. 376, Art. 13).

Are foreign exchange losses counted in the capital loss test?

Until 1 January 2028, losses on foreign currency liabilities not yet performed may be disregarded and disclosed in the notes (Communiqué on Art. 376, Provisional Art. 1).

Who is responsible for the financial statements?

The issuer and, according to fault, its board members, with independent auditors responsible for their reports (Capital Markets Law Art. 14; Commercial Code Arts. 553 and 554).

Is intentionally false financial reporting a crime?

Yes. Intentionally preparing financial statements that do not reflect the truth is punished under the Criminal Code (Capital Markets Law Art. 112(2)).

Related guides

• Turkey’s 2026 Fund and Market Manipulation Crisis: Legal Guide for Foreign Institutional Investors — the entry point to this series
• MSCI’s Turkey Index Freeze and the Legal Response
• Lease Certificates (Sukuk) in Turkey
• Financial Reporting Fraud and Audit Failures in Turkish Listed Companies
• Dividends in Turkish Listed Companies
• Capital Increases, Rights Issues and Dilution in Turkey
• Directors’ and Auditors’ Liability in Turkish Listed Companies
• Shareholder Rights in Turkish Listed Companies
• Calculating Damages in Turkish Securities Claims
• Taxation of Foreign Institutional Investors in Turkey
• Insolvency in Turkey: Concordat and Bankruptcy Claims
• Turkish Investment Fund Rules