Blockchain & Cryptocurrency Regulation in Turkey

1. Government Attitude and Definition :

Evaluating concerning the law no. 6493 “Law on Payment and Securities Consensus Systems, Payment Services and Electronic Money Institutions” which is the closest arrangement related to the electronic money, we see that cryptocurrency is not a payment instrument and does not fit this definition.

Likewise, the disclosures of the BRSA (Banking Regulation and Supervision Agency — BDDK ) and the SPK ( as the regulator authority of Turkey about securities in Turkey — CMB similar to SEC ) are also in this direction. In this case, although we call it cryptocurrency, they are not yet defined as money in our law. There is no definition other than that, too. Without a description, there can be no law. The relevant subject must be clearly defined scientifically for a law to exist.

A similar situation exists not only for our country but also for many countries. Different definitions have been introduced in many countries of the world. Japan defined it as “money” whereas in the US it is ‘’ commodity or ‘’fund’’ and in the European Court of Justice “payment instrument”. Each day, countries diversify their definitions. It should be known that the legal and tax consequences vary according to the definitions.

Turkish government currently stands as an observer of this field. Previously the government had a negative attitude to cryptocurrencies and blockchain environment, but day by day with the good promotion of blockchain enthusiast’s effortless works and global trends helped the government to change their attitude towards to positive way.

2. Cryptocurrency Regulation :

As it can be seen, legal legislation of cryptocurrencies cannot be talked about since they have not been defined legally yet in Turkey. However, the absence of a legal definition of cryptocurrencies don’t mean they are “Prohibited.” In accordance with the ‘principle of law’, it is unthinkable that an act without a law is prohibited.

3.Sales Regulation :

As mentioned above there is no legal definition of cryptocurrencies also the regulations. But as securities law perspective; SPK (as the regulator authority of Turkey about securities in Turkey — similar to SEC.) has a former agreement with SEC with the projection of exchanging the regulations. According to that; SPK is to be expected such a possibility to follow the regulations as SEC has already declared and has been implementing.

3. Taxation :

There has been no specific definition made for cryptocurrencies in Turkish tax legislation, yet. Under current regulations, gains to be derived from cryptocurrencies cannot be included in any of the taxable income categories for individuals; therefore, they are not subject to taxation as per Income Tax Law no. 193. For corporations, any income, regardless of its source, is taxable; therefore, gains to be derived from cryptocurrencies are subject to corporate income tax at 22% (for 2018) (Corporate Income Tax Law no: 5520). Since there is no legal definition made for cryptocurrencies, it may be concluded that there is no VAT on cryptocurrencies for now. VAT treatment of cryptocurrencies would totally depend on the legal definition and specific regulations to be made on this issue in the future.

Two basic methods could be applied by the authorities;

a) Making a definition for the cryptocurrencies in a declaration,

b) Establishing a particular law or amending current tax laws for cryptocurrencies.

If the regulations are made with a declaration, taxes may be levied retroactively (last 5 years). If the regulations are made with changes in tax laws (or with a special law), such rules should be applied as of the date of the new regulations and no retroactive taxation should occur.

Turkish tax authority is expected to treat cryptocurrencies as “commodity” as such definition would lead to taxation (from 15% to 35%) on the income derived over the trade of cryptocurrencies for individuals. If no specific regulations are made for VAT purposes, the applicable VAT rate would be 18%. It is expected that no VAT will be applicable on trading of cryptocurrencies.

3. Money Transmission Laws and Anti-Money Laundering ( AML ) Requirements :

There are already up to twenty cryptocurrency exchange platforms operating and/or established in Turkey. These platforms are actively providing services with the cooperation of commercial banks in Turkey with related areas. Also, there is an organization which is called MASAK (The Financial Crimes Investigation Board) which regulates the money transmissions and other financial instruments of banks and exchanges by the name of the Ministry of Treasury and Finance of Turkey . According to a report which is published on 20th November 2014, article number T-001–3.47 specifically “Bitcoin” has been defined as a fact of suspicious transmission. As you may understand from this report that only “Bitcoin” has been mentioned and it does not cover other cryptocurrencies as Ethereum, Litecoin, Ripple etc.

On the contrary, one of the pioneer commercial Bank of Turkey has a cooperation with a cryptocurrency and it has been known that the transmissions have been actively done.

Also as a natural result of lack of the cryptocurrencies definition in a jurisdiction in Turkey, there are no Anti Money Laundering ( AML ) requirements mentioned in any documents yet.

3. Promotion and Testing :

There is not a single definition of promotional programs such sandbox, airdrop or other bounty programs before but any possible commitment under these programs will be evaluated as non-compliant of general clauses obligations law and consumer law in Turkey. According to these; benefactor of these programs have rights to sue these programs organizations. Considering the lack of jurisdiction in these fields mentioned above does not mean that the benefactors does not have rights to apply to the obligations law and consumer law of Turkey.

4. Ownership and Licensing Requirements :

As mentioned before the licensing organization which is called SPK (mentioned above) does not operate this field but this organization can only operate in the field of defined currencies as fiat money. But this licensing and ownership matter is the matter of cryptocurrencies there are no organizations in Turkey cover these field by the lacking result of cryptocurrency definition.

5. Mining :

There are no regulations of restricting the activity of mining in Turkey. Mining requires the spending of electrical energy and it costs; according to these facts, there should be permissions to take from the government if there is excessive use of power.

Income to be generated from mining activities are taxable as such activities may be treated as commercial activities as defined in Income Tax Law no. 193, regardless of the definition to be made for cryptocurrencies. Consequently, miners would need to fulfill bookkeeping, tax return filing requirements and pay income tax over their net income. VAT liability of miners would still depend on the legal definition of cryptocurrencies

6. Border Restrictions and Declaration :

Legally; there are no border restrictions and declaration of cryptocurrency holding needed in Turkey. Border restrictions and obligation of declarations are the matters of fiat money in our country. Declaration processes of fiat money are quite different in Turkey than other countries, for example, commercial banks are mean to be responsible for declaring the amount upon 25k USD (or equal as 15k EUR, 50k TRY). As it may be seen upon fiat money, in case of completion of cryptocurrency definition, we expect that the border restrictions and obligation of declaration clauses will be announced.

7. Reporting Requirements :

As latest updates, there are no border restrictions and declaration obligation upon cryptocurrencies in Turkey. Although some cryptocurrencies exchange firms in Turkey take precautions to avoid suspicious transmissions and AML. These exchange firms preferred to put limitations on transmissions to get rid of any possible incidents.

8. Estate Planning and Testamentary Succession :

Due to Bitcoin or any other cryptocurrency can’t be used in formal documents

Att. Sima BAKTAŞ ( Founder / Lawyer at GlobalB Law )

Sedat BÜYÜK ( Tax Expert )


Barbaros Blvd 31/9 Besiktas 

Istanbul | Turkey  


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