A Turkish Company Issues a Credit Note but Does Not Refund You: Debt and Set-Off
Quick summary
| Question | Assessment |
|---|---|
| Focus | A Turkish Company Issues a Credit Note but Does Not Refund You: Debt and Set-Off |
| Legal starting point | TCO Articles 19, 112, 117 and 139–145 |
| Key record | Original paid invoice |
| First action | Send a net-balance reconciliation and demand the agreed repayment while addressing any specific, legally supported deduction. |
The issue and the legal distinction
An overseas customer may return goods and receive a credit note, yet the supplier insists it can only be used for future orders. Check the agreed return settlement, whether the original invoice was paid and any outstanding cross-debts. A credit against an unpaid invoice may simply reduce the amount owed; it cannot be refunded as if cash had already left the buyer.
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What changes the assessment
Reconcile the full account in the original currency. Match the credit note to returned quantities, freight adjustments and taxes.
An asserted set-off needs mutual debts and applicable legal conditions; a supplier cannot assume any unrelated group-company claim can be deducted. Preserve the messages that explain whether the note was issued as a final refund acknowledgment.
Legal framework
Provisions to examine: TCO Articles 19, 112, 117 and 139–145.
Identify the creditor, debtor and exact source of the payment obligation before calculating a balance. A bank statement proves a movement of money, but its contractual purpose may require invoices, notices and instructions. TCO Article 112 governs contractual breach where applicable; default under Article 117 requires its own analysis.
Security, assignment, payment-services, banking or financial-leasing rules can change the position and should be checked for the actual product. A demand should state what is due, in which currency, and why. Do not treat a contested accounting entry as an automatically enforceable judgment.
Evidence to preserve
- Original paid invoice.
- Return agreement and receipt.
- Credit note and stated purpose.
- Full account and asserted set-off.
Keep the original documents, identify their source and record when they were received. Preserve the version effective when the promise was made. Where a document is held by the opponent, request lawful preservation and consider the appropriate procedural route rather than trying to obtain it through unauthorised access.
A hypothetical example
Suppose returned goods were fully paid and the seller issues a credit note acknowledging repayment. That differs from crediting an invoice the buyer never paid.
If the seller claims an offset for another debt, verify mutuality and legal conditions. A reconciled net balance is more reliable than treating the face amount of every accounting note as immediate cash due.
This illustration explains the distinction; it is not a reported case or a prediction of an outcome.
Practical next steps
Send a net-balance reconciliation and demand the agreed repayment while addressing any specific, legally supported deduction.
Build the first notice around the particular evidence: original paid invoice, the relevant date, the alleged failure and the requested response. Keep proof of delivery. A preservation request, a demand for performance and a final election of remedies can have different consequences; choose them with the contract and deadlines in view.
Remedies and financial loss
The principal is the genuine cash overpayment after credits and lawful offsets. Interest and additional loss require separate analysis.
Procedure for a client outside Turkey
Nationality alone does not decide governing law or forum. Review the parties, place of performance, contractual choice, any arbitration provision and applicable mandatory rules. Consumer and employment matters can require protected-forum analysis. Turkish proceedings may also require a mediation step or security analysis depending on the dispute; neither should be assumed applicable to every case.
For a Turkish civil case, counsel can consider whether evidence preservation under HMK Articles 400 onward or interim relief under Articles 389 onward is justified. These are different measures with specific conditions, possible security and follow-up duties. A general fear of nonpayment does not establish entitlement to every injunction. Calculate the actual notice and filing calendar before waiting for a voluntary reply.
Primary legislation and official sources
- Turkish Code of Obligations No. 6098
- Code of Civil Procedure No. 6100
- International Private and Procedural Law No. 5718
Apply the wording and amendments effective for the relevant transaction and procedural step. A historical enactment text does not by itself establish the current rule.
Frequently asked questions
Does every credit note create a cash refund?
No. It may cancel unpaid invoicing or create an agreed future credit; payment history and settlement wording are decisive.
What is the main legal distinction?
An overseas customer may return goods and receive a credit note, yet the supplier insists it can only be used for future orders. Check the agreed return settlement, whether the original invoice was paid and any outstanding cross-debts.
Which fact can change the legal assessment?
Reconcile the full account in the original currency. Match the credit note to returned quantities, freight adjustments and taxes.
Which documents should I preserve?
original paid invoice, return agreement and receipt, credit note and stated purpose, full account and asserted set-off. Preserve the original versions and the dates on which they were received.
What should I do first?
Send a net-balance reconciliation and demand the agreed repayment while addressing any specific, legally supported deduction.
How should the claimed loss be calculated?
The principal is the genuine cash overpayment after credits and lawful offsets. Interest and additional loss require separate analysis.
Which legal provisions should be examined?
TCO Articles 19, 112, 117 and 139–145. Governing law, transaction classification and mandatory rules determine their application.
How could this issue arise in practice?
Suppose returned goods were fully paid and the seller issues a credit note acknowledging repayment. That differs from crediting an invoice the buyer never paid. This is a hypothetical illustration, not a reported case.
Does sending a complaint stop every deadline?
No. Contract notice, limitation, appeal and procedural periods can differ. A lawyer should calculate the dates from the actual contract and service records; informal negotiation does not automatically preserve every right.
When should a technical or accounting expert be involved?
Use an appropriately qualified expert where the disputed fact requires specialist analysis. Define the question using return agreement and receipt and credit note and stated purpose; preserve the original material before corrective work.
Can this matter be assessed while I am abroad?
An initial assessment can start with the contract, chronology and the records listed above. Formal representation, any personal attendance and inspection requirements depend on the case.
What should a settlement specify?
Identify the parties, covered claims, payment, remaining performance and any release. Account for third-party recoveries and do not assume a partial payment settles every related obligation.
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