Türkiye’s banking regulator rules out inflation accounting for 2025

Türkiye’s Banking Regulation and Supervision Agency (BRSA) has decided that banks and several non-bank financial institutions will not apply inflation accounting in their financial reporting for 2025.

The decision confirms that the sector will continue preparing statements without inflation-adjusted valuations for the annual period.

Inflation accounting is used to adjust financial statements when inflation distorts the real value of assets, costs, and profits, and its main advantage is preventing companies from being taxed on inflation-driven, non-real profits.

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BRSA confirms banks will stay outside inflation accounting rules

In its announcement, BRSA said the Board Decision dated January 11, 2024, which had mandated the implementation of inflation accounting as of January 1, 2025, had been withdrawn. With the removal of that decision, banks and institutions such as financial leasing, factoring, financing, savings financing, and asset management companies will not apply inflation accounting.

The step follows an earlier decision taken in December 2024, when BRSA had ruled that inflation accounting would not be applied for the 2024 reporting period.

Under Türkiye’s tax legislation, firms must apply inflation accounting when the domestic producer price index (D-PPI) rises by more than 100% over the previous three accounting periods, including the current one, and also increases by more than 10% within the current period.

Aerial view of the Istanbul Financial Center, a major hub for banking, finance, and investment institutions in Istanbul, Türkiye. (Adobe Stock Photo)

Businesses push back against inflation accounting rules

Inflation accounting returned to use in Türkiye after a 2023 decision requiring companies to apply it from 2024 onward, a period marked by high inflation. Although the system was intended to offer more transparent financial reporting, businesses have recently voiced concerns, arguing that it has evolved into a structure that increases costs, creates uncertainty and raises the overall tax burden across many sectors.

However, the requirement remains in place for the real sector, excluding the banking industry, and business representatives have intensified their calls for the practice to be discontinued.

BRSA’s decision is expected to support the banking sector’s overall financial health by preventing additional reporting volatility on balance sheets.

December 23, 2025 05:03 PM GMT+03:00