Turkish Lira Debt Interest After 31 July 2026: The New Statutory Formula and Commercial Default Claims

Direct answer: The 2026 amendment replaced the old fixed-rate wording in Article 1 of Law No. 3095 with a formula: 80% of the Central Bank rediscount rate applicable on the preceding 31 December, subject to the statutory mid-year test. The official Central Bank table gives 38.75% for that reference date in 2026, producing 31% annually. Commercial default interest under Article 2 follows a different comparison using the advance rate, currently 39.75% at the relevant reference dates. Neither figure automatically applies to every invoice, foreign-currency debt, tax claim or contractual interest clause.

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Legal sources checked: 29 October 2026. This English explanation does not replace the authoritative Turkish legislation.

What changed on 31 July 2026

The amendment to Article 1 of Law No. 3095 on Statutory and Default Interest was enacted by Article 10 of Law No. 7589. The official consolidated text records 31 July 2026 as the commencement date for this amendment. Parliament identifies the amending law as adopted on 16 July 2026 and published in Official Gazette No. 33326 on 31 July. The adoption date is not a substitute for its effective date when preparing an interest schedule.

The new rule uses a defined Central Bank benchmark rather than treating a percentage quoted in an older article as permanently correct. It applies where interest must be paid under the Turkish Code of Obligations or the Turkish Commercial Code and the rate has not been determined by contract. That opening condition is important: Article 1 supplies a rate in its field of operation; it does not establish that every commercial disappointment or unpaid demand earns interest from the moment the claimant wishes.

For a claim spanning the amendment date, separate the periods before deciding which rule applies. An account extending from an earlier year into October 2026 cannot responsibly be prepared by multiplying every day by the latest rate. Identify the legally applicable rate for each historical segment, any binding interest clause and the legal basis of the obligation. This guide explains the post-amendment method, not a universal retrospective recalculation of final judgments or agreed settlements.

The reference date is not necessarily the day the case is filed

Article 1 begins with the rediscount rate applied by the Central Bank on 31 December of the preceding year. For the 2026 annual reference, the relevant date is therefore 31 December 2025. The official Central Bank historical table records a rediscount discount rate of 38.75% effective from 20 December 2025. Applying the statutory multiplier gives 38.75 × 0.80 = 31.00. This is an annual percentage, not a monthly charge.

The same provision creates a mid-year comparison. If the rediscount rate on 30 June differs by five percentage points or more from the rate on the preceding 31 December, 80% of the 30 June rate applies for the second half of the year. A difference of five percentage points is not a five-percent relative change. The statutory comparison must use the benchmark rates themselves, before applying the eighty-percent multiplier.

The official table examined for this article shows no intervening change after 20 December 2025 affecting those 2026 reference dates. The calculation therefore remains 31% under the verified inputs. A later filing date does not justify replacing the reference-date rate with a random current policy rate. Nor should the annual figure be presented as an immutable rate for 2027: a new year requires a new reference-date check under the statute.

Commercial default interest uses a separate advance-rate comparison

Article 2 first provides for default interest at the Article 1 rate unless the parties have agreed otherwise. It then creates a commercial rule: where the Central Bank short-term advance rate on the preceding 31 December exceeds that amount, default interest in commercial matters can be claimed at the advance rate even without an agreement fixing that rate. The advance column and rediscount column in the Central Bank table must therefore not be swapped.

The verified reference-date advance rate for 2026 is 39.75%, whereas the new Article 1 calculation is 31%. The commercial Article 2 rate is not eighty percent of 39.75%. The eighty-percent multiplier belongs to Article 1 and its rediscount benchmark; Article 2 uses its own comparison. A demand that quotes the correct source but applies the wrong multiplier still produces the wrong legal calculation.

Commercial status must be established from the transaction and the applicable rules, not simply from a foreign creditor having a company name or a large invoice. Article 2 also contains its own 30 June five-percentage-point test for the advance rate. Where no default rate was agreed but a valid contractual ordinary-interest rate is higher than the statutory alternatives, the last paragraph of Article 2 provides that default interest cannot be lower than that contractual ordinary-interest rate.

Classify the debt before selecting a rate

The first classification is currency. The fact that the debtor operates in Türkiye does not make a debt denominated in euros or US dollars a Turkish lira debt. Law No. 3095, Article 4/a, contains a separate foreign-currency interest rule referring to the highest rate paid by state banks on one-year deposits in the relevant currency where a higher contractual rate has not been agreed. Applying 31% to a euro principal merely because litigation will take place in Türkiye is not the Article 4/a method.

The second classification is the legal regime. Article 4 preserves provisions in other laws requiring higher default interest. A tax refund, an employment entitlement, a regulated consumer-credit account or a specially governed commercial supply obligation must therefore be examined under its own legislation before using this general guide. The figures here are not an alternative to that classification and do not override a special statute.

The third classification is the law governing the obligation. International contracts can raise a choice-of-law issue separate from the location of enforcement assets. An English-language contract and an overseas creditor do not themselves decide the applicable law. The article addresses cases in which the Turkish interest rules discussed are applicable. For the preceding analysis, the firm maintains a separate guide to governing law under Article 24 of the Turkish private international law statute.

A correct percentage cannot repair an incorrect default date

Article 2 applies to a debtor in default of paying money. For the ordinary contractual default framework, Turkish Code of Obligations Article 117 starts from a due debt and a creditor demand, while specifying cases in which default follows without that demand. One such situation concerns the expiry of a payment day fixed by the parties, or properly fixed through an agreed contractual mechanism. The legal explanation must identify the relevant branch rather than assign every invoice the same interest start date.

An invoice date, delivery date, agreed due date, demand date and date of service can all be different. The evidence should show the payment term actually agreed, whether performance making payment due occurred, the content of any later extension and proof of the required demand. A unilateral due date inserted into an invoice must not automatically be described as a jointly agreed contractual date without checking the underlying agreement and communications.

Where instalments fall due at different times, each unpaid instalment requires its own starting point. A later agreed payment plan may change the analysis, and the actual wording needs review. Merely adding the instalments together and charging the earliest instalment date against the entire aggregate can overstate the claim. A defensible calculation makes both the rate and the starting event visible for every component of the principal.

Simple interest and the principal balance

Article 3 of Law No. 3095 prohibits compound interest when calculating statutory and default interest, while reserving the relevant Turkish Commercial Code provisions. The baseline calculation should therefore keep principal and accrued interest separately. A spreadsheet that automatically adds each month’s interest to principal and then charges interest on the enlarged figure is not the ordinary Article 3 approach.

The reservation for commercial legislation does not mean that every business-to-business invoice permits monthly capitalization. Any reliance on an exception needs its actual statutory conditions and an applicable agreement where required. The claimant should identify the exception expressly instead of hiding compounding inside a daily or monthly spreadsheet formula. This guide does not assume that such an exception exists for an ordinary unpaid invoice.

Partial payments also require a documented allocation. Record when a payment was made, the amount received, the stated purpose and the legally relevant appropriation between costs, interest and principal. The principal after a payment is not a number that should be guessed. A schedule using a constant opening balance despite later principal reductions can overcharge, while an unsupported assumption that every receipt reduced principal immediately can understate accrued interest.

How to present an auditable calculation

A transparent schedule identifies the claim currency, principal for each segment, legal basis, annual percentage, start and end dates, counted days, day-count convention and any payment changing the balance. Keep the source of the benchmark alongside the formula. For a short period wholly within the applicable post-amendment regime, this is easier to audit than a single unexplained figure labelled “legal interest”.

For arithmetic illustration only, take a Turkish lira principal of TRY 1,000,000, an independently established 90-day interest period, a 31% simple annual rate and an expressly chosen actual-days-over-365 calculation. The arithmetic is 1,000,000 × 0.31 × 90 ÷ 365 = TRY 76,438.36. This illustration does not decide when a real debtor defaulted, whether both boundary dates are included, whether the principal changed or which day-count treatment a particular enforceable instrument requires.

Using the same assumed balance, period and convention at 39.75% produces TRY 98,013.70. The difference demonstrates why the classification cannot be left to a spreadsheet operator: a mathematically accurate commercial-rate result is still legally wrong if the claim does not qualify for that rate. Neither illustrative amount includes litigation costs, enforcement costs, tax, exchange conversion or separately recoverable compensation.

The documents an overseas creditor should provide

Provide the signed contract, purchase order or other basis of the obligation together with the document establishing delivery or performance. Add invoices, the agreed credit terms, amendments, settlement negotiations that actually changed payment obligations and the demand or notice relied on for default. Where a payment was received, supply the bank record and any accompanying allocation instruction. A ledger should reconcile with the underlying documents rather than substitute for them.

A foreign creditor should also identify its exact legal entity and the Turkish debtor’s exact legal entity. A trading name, website name, group company or intermediary is not automatically the contracting party. The interest calculation depends on an enforceable monetary obligation of the named debtor. Sending a detailed rate table to the wrong company does not correct the underlying identity problem or establish default against the real obligor.

Translate the relevant payment clause and notice accurately, preserving the original documents. Do not translate “interest”, “late-payment fee”, “penalty” and “exchange adjustment” as if they were always the same legal claim. The original wording can affect classification, validity and whether amounts overlap. The separate international-client contract dispute guide explains the wider contract file; this article focuses on interest selection and calculation.

Draft the demand and litigation request consistently

A well-defined demand separates principal from interest, identifies the currency, describes the rate claimed and states the asserted starting event. Where a changing statutory rate is sought, explain that the rate is determined under the applicable legislation for the relevant periods. Do not describe a statutory rate as a guaranteed fixed return extending indefinitely into future years. The interest request must remain consistent with the contractual and legal position taken in the same document.

Before starting enforcement or litigation, reconcile the demand with the proposed claim. A foreign creditor should not claim a euro principal in one document, convert it to lira in another without explanation, and then apply the ordinary lira rate to the original euro amount. Any election about the debt currency or conversion must be assessed separately under the applicable obligations rules. The calculation here does not itself authorize a currency conversion.

The competent court, procedural route, possible pre-action mediation and deadlines depend on the underlying dispute, not merely on the rate of interest. An unpaid commercial invoice, a private loan and a consumer refund are not interchangeable case types. The firm’s debt collection and enforcement guide for overseas clients addresses that procedural stage. Do not assume that informal discussions about the interest spreadsheet preserve a limitation period or suspend a procedural deadline.

How a debtor can identify an overstated interest demand

Begin with the rate basis. Ask whether the claimant relies on an agreed rate, Article 1, commercial Article 2, foreign-currency Article 4/a or a special statute. Then check the relevant reference dates against the official Central Bank table. A demand that applies an advance rate while citing only the ordinary statutory formula needs clarification. So does one using a policy rate from a different Central Bank facility rather than the specified rediscount or advance benchmark.

Next test the dates and balance. Verify whether the debt was due, whether a default notice was required, whether it was properly communicated and whether later payments were accounted for. Inspect any automatic capitalization formula. Disputing the interest amount is not necessarily an admission that the principal is owed, and conceding an undisputed principal amount does not automatically settle a contested default date. State the position precisely in the relevant procedural response.

Finally, distinguish an objection about arithmetic from an objection about entitlement. A difference caused by including an extra day is not the same as applying the wrong statute to a foreign-currency obligation. The response should identify each error and its effect. This produces a verifiable reconciliation rather than a blanket refusal that leaves the actual dispute unexplained. It also prevents the parties from agreeing a settlement figure that silently carries forward an avoidable calculation mistake.

What must be rechecked before using this guide in another period

The statutory formula is designed around changing inputs. Preserve a dated copy or reference to the official rate table used for the calculation, together with the version of Law No. 3095 applicable to the claim period. For a new calendar year, identify the preceding 31 December rate again. For a second-half calculation, perform the 30 June comparison rather than assuming that an unchanged rate in one year proves the position in the next.

For a court judgment or settlement already fixing interest terms, read the operative wording before preparing an enforcement account. An article explaining the general statute does not authorize disregarding a binding judgment, rewriting a settlement or silently replacing the currency stated in an enforceable instrument. The question may be how a variable statutory reference operates within that instrument, or whether the instrument fixes something different. Those are document-specific questions.

The practical conclusion is a sequence, not a slogan: identify the obligation and applicable law; establish the currency and any valid agreement or special rule; prove the interest start date; select the proper statutory benchmark for each period; account for payments; and show the arithmetic openly. The 2026 amendment changes an important input, but a successful and accurately pleaded claim still depends on the whole underlying record.

Related English legal guides

Debt recovery from abroad; Applicable law for an international contract; Contract disputes for international clients.

Türkiye-wide file handling and two offices

Bakırcı & Keskin Hukuk Bürosu handles Turkish legal matters for clients residing in Türkiye and abroad. The physical offices are in Mersin and Istanbul; representation and file management extend throughout Türkiye. Initial communications and online discussions can be conducted in English. Assessment requires the underlying agreement, dated records and the precise relief sought. No result or recovery amount is guaranteed by this general publication.

Author: Av. Halil Bakırcı. For representation from abroad, see the power-of-attorney guide.