CONSEQUENCES OF LATE PAYMENT IN SUPPLY OF GOODS AND SERVICES (TCC ART. 1530)
In case the debt is not paid within the specified term under Turkish law, provisions of the Turkish Code of Obligations (“TCO”) numbered 6098 regarding default are applied. However, some special provisions are regulated under Article 1530 of Turkish Commercial Code (“TCC”) numbered 6102 in relation to the transactions between bussiness enterprises for the purpose of supplying goods and services. These special provisions are regulated on the basis of “European Union Directive on Combating Late Payment in Commercial Transactions numbered 2000/35/EC and 2011/7/EU”.
According to the Article 1530 of TCC, in case the payment deadline or period of payment is not determined, period of payment shall be 30(thirty) days. As a rule, parties may decide on a longer period in the contract. However, pursuant to the Article 1530/5 of TCC, period of payment specified in the agreement shall consist of 60 (sixty) days at most as of the date when the invoice or equiavalent payment demand or the date when goods or services are received or the review and acceptance procedure of the goods or services are completed. However, in the event that the creditor is a small or medium-sized enterprise (SME) or agricultural or animal producer, or if the debtor is a large-scale enterprise, the payment period cannot exceed 60(sixty) days.
In case the buyer does not comply with the payment conditions specified in the contract, the buyer goes into default without the necessity of notice pursuant to the Article 1530 of TCC. The defaulting buyer shall have to pay default interest without the necessity of notice. According to the Article 1530 of TCC, provisions stating that the debtor is not required to default interest; pays a very small amount of interest, the amount of which would be deemed to be grossly unfair or the debtor is not responsible for losses due to late payment are void.
The default interest rate applicable in commercial transactions may be freely determined by parties. However, the interest rate to be applied and the minimum compensatory amount that may be claimed for costs incurred to collect the receivable in cases where the default interest ratepertaining to late payments made to the creditor is not prescribed in the agreement or the related provisions are not applicable shall be declared annually in January by the Central Bank of Turkey. The interest rate to be declared in this framework must be at least 8% more than the default interest rate applicable to commercial transactions prescribed under the Law on Legal Interest and Default Interest dated 4/12/1984 and numbered 3095.
As can be seen, regulation under the Article 1530 of TCC was made in order to prevent late payments and protect SMEs that supply goods and services against strong enterprises in line with the European Union directives. Accordingly, it is regulated that as a rule, the period of payment is 30(thirty) days and debtor who fails to pay its debts in time goes into default without the necessity of notice and the creditor will be entitled to default interest.