New Law Grants President Broad Powers on Currency, Precious Metals, and Vehicle Taxes

The Turkish Grand National Assembly (TBMM) has passed a comprehensive new law amending the Law on the Protection of the Value of Turkish Currency and several related statutes. The legislation gives the President of Türkiye expanded authority over financial, trade, and taxation matters, with implications for currency controls, precious metal transactions, and automotive taxation.

Presidential Power Expanded Over Currency and Trade Flows

Under the newly ratified law, the President will have the power to regulate or restrict the import and export of:

• Foreign currencies (kambiyo)

• Cash, bonds, and securities (nukut, esham, tahvilat)

• Precious metals and stones, and products containing or made from them

• Trade documents and payment instruments

This authority aims to protect the value of the Turkish lira by controlling cross-border capital and commodity flows.

Heavy Penalties for Unauthorized Financial Activities

Individuals or entities operating without required licenses or permits in regulated sectors will face administrative fines ranging from ₺50,000 to ₺250,000. In addition, unauthorized operations will be shut down for one month.

In cases of repeat offenses within five years of a finalized penalty, the maximum fine will be imposed, reinforcing compliance in currency and precious metals trading sectors.

Tax Exemptions for Defense and Security Vehicles

The law also introduces Value Added Tax (KDV) exemptions for vehicles purchased for national defense and internal security purposes by:

• Ministry of National Defense

• Ministry of Interior

• Presidency of Defense Industries

• National Intelligence Organization (MİT)

These exemptions cover light commercial vehicles, trucks, pickup trucks, off-road vehicles, and motorcycles, provided they are used exclusively for defense and security needs. The rule also applies to non-domestically produced vehicles if no local alternatives exist.

President Authorized to Set and Adjust ÖTV Rates

The law grants the President sweeping authority over Special Consumption Tax (ÖTV) for certain vehicles and goods listed under Schedule II of the existing tax law. This includes:

• Setting minimum and maximum ÖTV bases

• Increasing rates up to 3x or reducing to zero

• Defining differentiated rates based on engine volume, battery capacity, or driving range for vehicles like:

  • Passenger cars

  • Station wagons

  • Racing cars

  • Other motor vehicles designed primarily for human transport

This flexibility aims to incentivize domestic production, support electrification, and stabilize market dynamics amid inflation and economic restructuring.