Contributed by TÜZEL YEMİNLİ MALİ MÜŞAVİRLİK VE BAĞIMSIZ DENETİM A.Ş., Turkey

Subject: Law No. 7244 which Includes Economic Measures for the COVID-19 Pandemic Has Been Published.

The Law for Reducing the Impacts of the New Coronavirus (Covid-19) Pandemic on Economic and Social Life and Law on Amendments to Certain Laws No. 7244 has been promulgated on the Official Gazette dated 17.04.2020 and numbered 31102.

In this regard, the following amendments are made in the legislation:

1) Termination of any employment contract by the employer is prohibited for 3 months. Accordingly, employers cannot lay off their employees between 17.04.2020-17.07.2020 unless the employee who is whether in the scope of the Law 4857 or not, acts in violation of ethics or goodwill. Employers can partially or completely send the workers to leave without pay for the mentioned period. The President of Turkey is authorized to extend this period to 6 months.

2) Daily 39,24 TRY (1.177,20 TRY monthly) will be paid to workers who were laid off or sent to leave without pay after 15.03.2020 from the unemployment insurance fund. The payments will be subject to 0,759% stamp tax cut only.  President of Turkey is authorized to extend this period to 6 months.

3) The Short Term Working Allowance will be initiated upon employer’s application without waiting for the completion of compliance inspection. In case it is understood that incorrect information has been provided by the employer, the paid allowance will be recollected with late payment interest. The allowances will be paid on 5th of each month starting from May.

4) Dividend Distribution Restrictions will be applied until 30.09.2020.

a) Corporations will be allowed to distribute only %25 of their 2019 profits.

b) Previous year gains and legal reserves cannot be subject to distribution.

c) The General Assembly will be unable to grant authority to the Board of Directors for Advance Dividend Distribution.

If the General Assembly has decided to distribute dividends regarding FY 2019, but the shareholders have not yet been paid or have obtained partial payments, payments related to the portion exceeding 25% (twenty five percent) of the annual net profit of the year 2019 shall be postponed until 30/09/2020.

5) Activities carried out in R&D and design centers and Technology Development Zones may be allowed to be carried out outside the region temporarily.

Dated: [bxcode.pagedata.date]