EXTENSION OF TEMPORARY RELIEF FOR CAPITAL LOSS AND OVER-INDEBTEDNESS CALCULATIONS UNDER ARTICLE 376 OF THE TURKISH COMMERCIAL CODE
An amendment published in the Turkish Official Gazette on 10 October 2026 extended until 1 January 2028 the temporary relief allowing certain expenses and losses to be excluded when assessing capital loss and over-indebtedness under Article 376 of the Turkish Commercial Code (TCC).
Scope of the Amendment
The relief is relevant to joint stock companies, limited liability companies and partnerships limited by shares when performing assessments under Article 376 of the TCC. It does not remove statutory financial reporting requirements or directors’ obligations where capital loss or over-indebtedness arises.
Amounts That May Be Excluded
For Article 376 calculations, companies may exclude all foreign exchange losses arising from foreign-currency liabilities that have not yet been settled, together with half of the aggregate lease expenses, depreciation and personnel expenses accrued in 2020 and 2021. These amounts remain in the accounting records; the relief applies only to the relevant Article 376 assessment.
Extended Deadline and Effective Date
The previous expiry date of 1 January 2027 has been extended to 1 January 2028. The amendment entered into force on 10 October 2026.
Practical Considerations for Companies
Companies exposed to capital loss or over-indebtedness should update their Article 376 calculations, retain supporting documentation for excluded amounts and consider the necessary disclosures in the notes to their financial statements. The duties of boards of directors or managers to convene shareholders, consider remedial measures and follow applicable procedures where over-indebtedness is suspected remain relevant.
