Important Decision From The Constitutional Court On Inflation Adjustment

In its decision No. E. 2023/105 K. 2023/208 dated 30 November 2023 ("Constitutional Court Decision" or "Decision"), the Constitutional Court of the Republic of Türkiye ("Constitutional Court") annulled the regulation stating that inflation adjustment will not be made for 2021. The Decision was published in the Official Gazette numbered 32431 on 16 January 2024, and since the Decision does not make a special determination regarding the effective date, the related regulation has been abolished as of 16 January 2024.

Inflation Adjustment

Article 298 bis of the Tax Procedural Law No. 213 ("TPL") defines inflation adjustment as the calculation of the purchasing power of non-monetary assets at the date of the financial statement by multiplying them with the adjustment factor, and the main purpose of inflation adjustment is to remove the effects of high inflation for many years and thus eliminate the negative effects of the increase in the tax base that does not