A New Era in Statutory Interest: Amendment to Law No. 3095

What is statutory interest?

Statutory interest is the rate applied where interest is payable under the Turkish Code of Obligations (Türk Borçlar Kanunu) and the Turkish Commercial Code (Türk Ticaret Kanunu), but the parties have not specified an interest rate in their contract. Statutory interest directly affects the outcome of many disputes, including claims for compensation, claims for repayment and cases of default.

The new provision

Article 10 of Law No. 7589 has amended Article 1 of the Law No. 3095 on Statutory Interest and Default Interest (3095 sayılı Kanuni Faiz ve Temerrüt Faizine İlişkin Kanun). Under the new provision:

"...if its rate has not been specified by contract, this payment shall be made at an annual rate equal to eighty percent of the rediscount rate applied by the Central Bank of the Republic of Türkiye to short-term credit transactions on 31 December of the preceding year."

In addition, if the rediscount rate on 30 June differs by five percentage points or more from the rate on 31 December of the preceding year, eighty percent of the rate determined on 30 June will apply during the second half of the year.

Who is affected?

• Parties to creditor–debtor relationships where the interest rate has not been specified by contract,

• Claimants seeking interest in compensation proceedings,

• Creditors seeking statutory interest in enforcement proceedings.

The period and the claim by reference to which the applicable rate is to be calculated must be assessed separately in cases arising during the transitional period.

This article is for general information purposes and does not constitute legal advice.