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Economic Stability Shield Package Against COVID-19 Outbreak

Turkish President Recep Tayyip Erdoğan announced a package of measures called Economic Stability Shield consisting of several measures for various sectors, aiming at the protection of the economic stability and decrease and prevention of the adverse effects of the coronavirus outbreak (COVID-19) on the Turkish economy.

The abovementioned package include the following measures concerning companies and firms operating in various sectors:​

  • April, May and June payments of brief tax declarations and VAT withholding as well as social security premiums shall be deferred for 6 months for retail, shopping mall, iron-steel, automotive, logistics-transportation, cinema-theatre, accommodation, food-beverages, textile-garment and event-organization sectors.

  • Easement right and revenue share payments for April, May and June concerning hotel renting shall be deferred for 6 months.

  • VAT rate shall be reduced from 18% to 1% in domestic airline transportation for 3 months.

  • Accommodation tax shall not be imposed until November 2020.

  • For firms whose cash flows are interrupted due to measures regarding COVID-19 outbreak, principal and interest payments to the banks shall be postponed for minimum 3 months and additional financial support shall be provided to those firms, if needed.

  • For merchants and craftsmen, who will declare that their businesses are adversely affected, principal and interest payments for their credit debts to Halkbank shall be postponed for 3 months without interest.

  • Annotations of “force majeure” shall be put on the credit records of firms which go into default in April, May and June due to the measures taken to prevent the spread of virus.

  • Stock financing support shall be provided to the exporters in order to maintain capacity utilization rates during the temporary slowdown in exportation.

  • Credit Guarantee Fund limit shall be increased from 25 billion Lira to 50 billion Lira and the priority for credits shall be given to the firms and small and medium sized enterprises having liquidity needs and collateral deficit due to negative effects of the latest developments.

  • Credit viability of residences valued at under five hundred thousand Lira shall be increased from 80% to 90% and minimum advance payment shall be reduced to 10% in housing loans.

  • Short time work allowance will be put into action, and the procedures required to benefit therefrom shall be facilitated and accelerated. Thus, temporary income support shall be given to the employees of workplaces which suspend their activities, and the costs of their employers shall be reduced.

  • In order to ensure continuity in employment, the 2-month compensatory working period shall be increased to 4 months.

  • Minimum wage support shall be continued.

  • It shall be ensured to render the flexible and remote working models regulated under the current legislation more effective.

  • Alternative channels shall be developed against possible interruptions in global supplies, according to the priorities determined for both production and retail.