Turkey

General overview

In Turkey, while no strict lockdown measures have been put in place, citizens over 65 or with chronic medical conditions are not allowed to leave their houses.

Citizens are advised not to leave their homes unless necessary for at least three weeks, and to minimise social contact until the threat of COVID-19 recedes. Most corporates and private companies are working from home where possible.

On 22 March, restaurants and coffee shops, gyms, hairdressers, pubs and nightclubs were closed (however, restaurants can still provide takeaway services).

Gatherings at mosques and other social gathering places are advised not to be used and major shopping malls started closing until further notice.

President Erdogan has said the pandemic could become an opportunity for Turkish manufacturers, as global companies seek to shift production away from China. Go here for recent announcements on COVID-19 from the Presidency of the Republic of Turkey.


Economic situation

Government and business response

On 18 March the Turkish government announced a number of measures in response to COVID-19 to ensure the impact on business is minimised.

The President introduced an Economic Stability Shield stimulus package, deploying 100 billion lira (approx USD$15.4 billion) to reduce the economic impacts of the COVID-19 outbreak.

The measures that Turkey will put into practice in this framework are set out in this Turkish-language announcement and summarised below:

  1. The government will postpone the April, May and June VAT and social security payments for six months – covering the retail, iron-steel, automotive, logistics and transportation, cinema, accommodation, food and beverage, textile/garment and event sectors.

  2. Turkey will not apply accommodation tax until November, and will postpone the easement rights and revenue share payments for hotel rentals for six months for April, May and June.

  3. VAT for domestic air transportation is reduced from 18% to 1% for three months.

  4. Businesses affected by the measures against COVID-19 can delay loan principal and interest payments for a minimum of three months, and will be provided additional financial support if necessary.

  5. Turkey will provide inventory financing support to exporters in order to maintain capacity during the temporary slowdown in exports.

  6. Turkish public bank Halkbank will postpone credit, interest and debt payments for three months of businesses and artists negatively affected by COVID-19.

  7. Turkey will increase its credit guarantee fund limit from 25 billion liras to 50 billion liras, and will give priority to SMEs with liquidity needs and collateral deficit.

  8. Turkey will increase the amount loanable from 80% to 90% in residences below 500 thousand liras, and reduce the minimum down-payment to 10%.

  9. Reflecting the impact of the pandemic, firms that have defaulted/bankrupted in April, May and June will have a "force majeure" grade in their credit registry.

  10. Turkey will postpone the periods of concise declarations containing payments of deductions made at source (such as withholding tax) for 3 months.

  11. Turkey will ensure that the flexible and remote working models in its legislation are made more effective.

  12. Turkey will implement the Short Work Allowance, to provide temporary income support. The processes required to benefit from it will be facilitated and accelerated.

  13. To ensure continuity in employment, Turkey will increase its two-month compensation period to 4 months.

  14. Turkey will develop alternative channels in line with the priorities they have set both in production and retail in case of disruption in global supply chains.

Bank response

To overcome liquidity shortage; Turkey Central Bank has launched the below measures for exporters:

Postponing open rediscount loan principal and interest payments with a maturity of April, May and June to October, November and December, with maximum maturity extended by 1 year.

Extending the commitment closing period for one year for rediscount credits which expired in April, May and June.

You can read a summary of the emergency tax measures for Turkish companies on PWC Turkey's website here.

Advice to exporters

In terms of immediate activity, make the safety and well-being of teams your priority, and invest as needed to ensure a safe and healthy working environment. Many businesses are still allowing employees to work from home where this is possible. Check in with your business partners and see how they are doing and how you might be able to support them during this time.


Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Business.govt.nz
Covid19.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
MFAT Export helpline
MFAT Safetravel
Immigration
Ministry of Health

Global agencies

World health organisation (WHO)
Centres for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.