Business in Turkey

Administrative Fine For Unreal Occupational Codes

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In the New Year, notified occupational codes must reflect the truth; otherwise employers will be liable to an administrative fine. 

Article 98/A of Income Tax Law No. 193 stipulated that, deducted taxes with tax bases, employees’ SSI premiums and total earnings, name of occupations and occupational codes as well as premium paid days must be declared online with Withholding Tax and Monthly Premium Service Document.

Although application of “Withholding Tax and Monthly Premium Service Document” is postponed to 1 July 2018 for most the provinces of Turkey, employers should update these codes at the beginning of the new year.

Because January is the month promotions and statute changes takes place in. Workplaces can update the changes on SSI screens by entering the real occupational codes of their employees without any administrative fine.

 According to Law no 5519/102-n that will be in effect as of 1st January 2018;

Workplaces that notified the occupational codes contrary to the facts, an administrative fine equal to 1/10 of monthly gross minimum wage for per employee will be imposed.

Employers are advised to check the above mentioned codes carefully and update the ones that don’t reflect the true occupation of the employees. 

Workplaces That will Enter Into Private Pension Implementation in the New Year

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We would like to remind you that the workplaces employing 10 (Inc.) to 50 (Exc) personnel will start to enter into contracts with pension companies and offer pension plans to the employees as of 1st January 2018.

As is known, Private Pension System, which is complementary to the mandatory state social security scheme in Turkey has been introduced by Law No. 6740 and entered into force as of 1st January 2017.

Deductions of Fines From Wages

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An amount of fine can be applied on employee’s wage for the reasons determined by the collective agreements or the employment contracts.  These fines are result of disciplinary punishments imposed by workplace’s disciplinary board, and cannot be more than two days’ wage in a month.

Fines are arranged in article 38 of Labor Law No. 4857, and the principles are as follows;

  • No fine can be imposed on an employee’s wage other than those determined by the collective agreement or the employment contract.
  • The fine must be notified to employee together with the reason immediately.
  • Wage deductions as fines cannot exceed two day’s wage in a moth. In case of piece work or in case the wage determined according to the amount of work to be done fine cannot be over employee’s two day’s earnings.
  • Fines must rely on solid evidences. 

Last Payment Date of November 2017 SSI Premiums Advanced

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Prim Ödemelerinin Öne Alınması

SSI premiums belong to November 2017 will be paid on 26th of December 2017, instead of end of the month.

As a rule, monthly employee and employer social security contributions are notified online by the 23rd of the following month, and premiums are paid at the end of the following month. In case the last day of the month coincides with public holiday, premiums should be paid at the first following workday.

However, as per provisional Article 34 of Law No.7061 “Amending Some Tax Laws and Governmental Decrees”  issued in Official Journal No. 30261, dated 5 December 2017, last payment date of November 2017 SSI premiums and postponed February 2017 premiums is determined as 26 December 2016.

Postponement on Combined Withholding Tax and Monthly Premium Service Document

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Application of Withholding Tax and Monthly Premium Service Document is postponed to 1 July 2018.

We have informed you that “starting from January 2018 withholding tax returns and SSI e-declarations will be combined in a single form under the name of ‘Withholding Tax and Monthly Premium Service Document;’ and SSI premiums and taxes withheld from employees declared only to the tax offices until the 23rdof the following month.”(According to Income Tax Law No. 193, Article 98/A that is added by Law No. 6728, and the General Communique published in the Official Gazette No 29983, dated 18th Feb. 2017).

Change in Actual Service Term Increment

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In the Communique, dated 3rd November 2017, SSI has announced that working days notification of employees who are subject to “actual service term increment” shall be limited to 26 days in a month.

As per Law No. 5510, Article 40, in order to evaluate the work under actual service term increment, it is obligatory for the insurance holder to actually work at the works stated together with the workplaces in this scope and to be exposed to the risks of the said works.

In this respect, vacation, paid and unpaid leaves, sick leave, periods spend on training and courses are not considered in the scope of above said article.

According to the announcement, the days worked in the scope of service term increment shall not exceed 26 days in a month. The other days such as weekends and paid leaves (non-worked but paid) shall be declared in different type of document in SSI platform, not exceeding 30 days in total.

turkceTherefore, following paid and unpaid leaves shouldn’t be included in actual service term increment:

  • Weekends, public and national holidays,
  • Annual vacation,
  • Leave of absence with pay “(ADDITIONAL ARTICLE 2 Employee shall be allowed to take; three days leave of absence with pay in the event of employee's marriage or adoption of a child, or in the event of the death of the employee's mother, father, spouse, brother or sister, and child; and five days leave of absence with pay in the event of employee's spouse giving birth.”
  • And the other paid leaves granted by employer’s discretion,
  • All kinds of unpaid leaves.

Minimum Living Allowance Support for Minimum Wage

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2017 net minimum wage will not be affected from the shift on taxable income brackets and will not get lower than 1.404,06 TRY between September and December.

As is known, Turkey's net minimum wage is determined as 1.404,06 TRY (minimum living allowance included) throughout 2017. In the application of income tax rates, the cumulative income is taken as a base. Until September 2017 the cumulative amount of minimum wage was in the first bracket, and the rate was 15%. But as of September some part of cumulative minimum wage has shifted to second bracket and 20% income tax will be applied to that part of the wage, and will lower it.

New Safety Standarts and Setting Up Rescue Stations in Mining Work

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Conveyer belts will be standardized and establishing rescue station will be compulsory in underground mining workplaces, according to amendment on the related Regulation. 

 “Regulation on Occupational Health and Safety in Mining Establishments” intended to determine the minimum health and safety requirements for mining works in order to protect the workers’ health and safety had been issued in Official Journal 28770, dated 19 September 2013.

Now with the amendment -issued in Official Journal 18 November 2017- new standards are required.

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