TRNC Government Moves to Boost Economy with Foreign Currency and Turkish Lira

The TRNC Parliament has added the "Bill on Introducing Fiat Currencies from Abroad into the Economy" to its agenda. With this measure, the government aims to revitalize the country’s economy and increase tax revenues.

Under the proposed bill, the import of foreign currencies and/or fiat Turkish lira into the TRNC will be encouraged, alongside the payment of required taxes. The goal is to stimulate economic activity, improve liquidity, and boost the government's tax income.

The law allows individuals and businesses to declare fiat money stored abroad within a certain timeframe and transfer it to bank accounts in the TRNC. A specific tax rate will apply to these transactions.

Those wishing to take advantage of this opportunity, whether individuals or legal entities, can submit applications until December 31, 2025. Applications will be processed by the Tax Department. The tax on the declared amount must be paid by the last working day of the month following the declaration. Penalties and interest will be applied to any late payments.

A similar practice was implemented through the "Decree on the Registration of Financial Assets" in August 2021. In just 20 days, around 880 million Turkish lira were registered. Finance Minister Dursun Oğuz reported that the government collected 22 million Turkish lira in taxes during this period. The decree set a tax rate of 2.5% on the registered principal amount.

The new bill aims to increase tax revenue and provide incentives to individuals and companies bringing their financial assets into the TRNC from abroad. If passed, it is expected to lead to significant financial activity within the TRNC economy.