Cash rent payments come to end across Türkiye

The new regulation enforces penalties on those who continue to pay rent in cash. All rent payments are now required to be processed through banks or Türkiye’s Post and Telegraph Agency (PTT).

Violators, including both landlords and tenants, will face fines starting from ₺5,000 ($146), with a maximum limit raised to ₺20 million ($583K).

New regulation takes effect across Türkiye

The Income Tax General Communique, prepared by the Ministry of Treasury and Finance’s Revenue Administration, was published in the Official Gazette, marking its entry into force.

According to the regulation, all rent payments for commercial properties and residences, regardless of whether the tenant is a taxpayer, must be made through banks or PTT.

All cash rent payments now included

The new rule encompasses all rental transactions, including short-term arrangements such as weekly or daily rentals. Previously, commercial rents were always required to be paid via bank or PTT, while residential rents were subjected to a ₺500 ($14.60) threshold.

Now, that limit has been removed, mandating that all payments must be processed electronically, regardless of the amount.

Minimum fine of ₺5,000 ($146)

In the past, only commercial renters and landlords faced penalties for cash payments, while residential tenants were exempt. However, with the law passed in July, which amended various tax laws and decrees, residential tenants can now also be fined.

Violators who fail to comply will face a special irregularity fine amounting to 10% of the rental amount, with a minimum fine of ₺5,000 ($146). Previously, the fine was set at 5% of the rent, with a minimum of ₺3,000 ($87.60).

Maximum fine raised to ₺20 million ($583,2K)

Tenants who make cash payments but report them to authorities within five business days will be exempt from fines. Furthermore, the annual cap for special irregularity fines has been increased from ₺8.7 million ($253K) to ₺20 million ($583K), significantly raising the stakes for compliance.

Additionally, amendments to the General Communique on Transfer Pricing Through Disguised Profit Distribution took effect on September 1, 2024, following its publication in the Official Gazette.

This new regulation marks a significant shift in rental transactions across Türkiye, aimed at increasing transparency and accountability in rental payments. Both landlords and tenants must now adjust to the new system, as the penalties for non-compliance have been made substantially stricter.