Legal News

Support for Additional Employment Extended

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istihdam tesvikleri

Social security premium and tax support for private sector employers, who employ persons amongst the registered unemployed of İŞKUR as an addition to the number personnel in the workplace, is arranged in the appended provisional articles (19 and 21) of the Law No 4447.

  1. SOCIAL SECURITY PREMIUM SUPPORT
  • Valid between 1 January 2018 and 31 December 2020.
  • Person to be employed should not be notified to SSI as insured more than 10 days in the workplace’s SSI premium and service documents within three months period preceding the month the work started at.
  • Person should be employed as an addition to the average number of insured personnel declared in the previous year.
  • Support amount:

Mutual Terminaton Payments will be Considered as Wage

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ikale odemelerSome compensation related to termination of employment paid in the scope of mutual termination agreement, work loses compensation, job security compensation, and end of work compensation will be considered as wage. However, part of these total payments not exceeding the amount of severance pays will be exempt from income tax.

When an employment contract is ended, various compensations are paid to entitled employees. In practice, treatment of these termination payments from the point of income tax and SSI premiums always causes confusion.

Now with the Omniums Bill (colloquially known as bag law) No. 7103, which is issued in Official Gazette No. 30373, dated 27th March 2018, description of wage in Income Tax 193 is amended by an additional clause as regard to mutual termination payments.

2018 Payroll Parameters

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bordro parametreleri

PAYROLL PARAMETERS 2018
APPLICATION NAMES  TRY
   
DAILY MINIMUM GROSS SALARY
MONTHLY MINIMUM GROSS SALARY
67,65
MONTHLY MINIMUM GROSS SALARY 2.029,50
   
NET MINIMUM WAGE (MLA İNCLUDED) 1.603,12
NET MINIMUM WAGE (WITHOUT MLA) 1.450,91
   
DAILY SSI PREMIUM EARNINGS BASE/Minimum LIMIT 67,65
DAILY SSI PREMIUM EARNINGS BASE/Maximum LIMIT 507,38
MONTHLY SSI PREMIUM EARNINGS BASE/MINIMUM LIMIT 2.029,50
MONTHLY SSI PREMIUM EARNINGS BASE / MAXIMUM  LIMIT (7,5* monthly gross min wage) 15.221,40
   
CHILD ALLOWANCE EXCEPTION/SSI (2% of min wage) 40,59
CHILD ALLOWANCE EXCEPTION/INCOME TAX (over 6) 27,14
CHILD ALLOWANCE EXCEPTION/INCOME TAX (ages 0-6) 54,28
   
FAMILY ALLOWANCE EXCEPTION/SSI (10%*min wage) 202,95
   
DAILY MEAL ALLOWANCE EXCEPTION/SSI (CASH) 4,06
DAILY MEAL ALLOWANCE EXCEPTION/INCOME TAX (MEAL CARD) 16
   
Private Pension+ private health insurance premium exception/premium earning base  608,85
   
TAXABLE INCOME BRACKET /% 15 0 – 14.800 
TAXABLE INCOME BRACKET /% 20 14.800  – 34.000 
TAXABLE INCOME BRACKET /% 27 34.000 – 120.000 
TAXABLE INCOME BRACKET /% 35 Over  120.000 
   
1st  GRADE DISABILITY INCOME TAX REDUCTION 1000
2nd GRADE DISABILITY INCOME TAX REDUCTION 530
3rd  GRADE DISABILITY INCOME TAX REDUCTION 240
   
SEVERANCE AMOUNT LIMIT (TRY/Year) 5.001,76
   
STAMP TAX RATE 0,00759
   
MINIMUM LIVING ALLOWANCE TRY
Marital Status MONTHLY
Single/Spouse working + 0 kid 152,21
Single/Spouse working + 1 kid 175,05
Single/Spouse working + 2 kidS  197,88 
Single/Spouse working + 3 kidS 228,32
Single/Spouse working + 4 kidS 243,54
Single/Spouse working + 5 kidS 258,76 
   
Married+Non working Spouse+0 kid 182,66
Married+Non working Spouse+1 kid 205,49
Married+Non working Spouse+2 kidS 228,32 
Married+Non working Spouse+3 kidS 258,76

2018 Minimum Living Allowance

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torba yasa agi

Minimum Wage 2018 has been announced as Gross 2.029,50 TRY, Net 1.603,12 TRY to be implemented al through the year. So the minimum living allowance is changed like other payroll parameters which are strictly connected with minimum wage.

Part of the wage that constitutes the amount of minimum subsistence level is not subject to income tax for real persons in Turkey legislation.

2018 Minimum Wage Announced

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asgari ücret iş kanunu

Minimum Wage 2018 has been announced as Gross 2.029,50 TRY, Net 1.603,12 TRY to be implemented al through the year.

Minister of Labor and Social Security revealed the decision of Minimum Wage Fixing Board in a press conference  today that Turkey’s monthly net minimum wage is increased from 1.404,06 TRY to 1.603,12 TRY with a monthly 14,2% wage hike (monthly net 199,06 TRY).  It is also announced that the minimum wage support will continue in 2017, but the exact support amount has not been determined for the time being.

Tax Reduction For Compliant Taxpayers are in Force

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vergi indirim 5

Taxpayers who pay their personal income and/or corporate taxes regularly on time will be benefiting from 5% tax discount in 2018. Tax reduction will be applied to income tax and corporate tax returns that must be filed as of 1st January 2018; and discount amount will not exceed one million TRY.

Article 121 of Income Tax Law 193 had already been rearranged with the heading of “Tax reduction for Compliant Taxpayers” last year.

Now with the Income Tax General Communique (Serial No.301) that has been issued in Official Journal Numbered 30279, dated 23 December 2017, details of application became clearer..

BENEFITING TAX-PAYERS

Following taxpayers will be benefiting from the tax reduction

  • Tax-payer of business, agricultural and occupational earnings,
  • Taxpayers of corporate tax (Companies in finance, banking field, insurance and reassurance companies, pension companies, private pension funds are excluded)

DISCOUNT AMOUNT AND LIMIT

  • 5% of the taxes calculated on the basis of the annual income or corporate tax returns will be deducted from the taxes to be paid, provided that previous last years’ tax returns were submitted and taxes are paid within the legal period.
  • If the discount amount exceeds the tax amount to be paid in the year, remaining part may be set-off from the other taxes accrued upon declaration of tax-payer within following full one year after the date tax returns should be submitted. The amount that couldn’t be deducted within this period will not be refunded.
  • Amount to be deducted in this respect shall not exceed 1 million TRY. Council of Ministers is authorized to double the amount or cancel out, or bring it down to statutory rate.

BENEFITING CONDITIONS

  • In order to benefit from the discount, income or corporate tax returns that belong to the year the discount is applied in and to the previous two years must be submitted and the taxes accrued on the basis of these returns must be paid within the legal period.
  • The tax returns submitted for correction, and missing payments up to 10,00 TRY per tax returns are not considered as violation of above rule.
  • As of the date the tax return is submitted there shouldn’t be overdue debt exceeding 1.000,00 TRY.
  • Tax-payers who are committed for tax evasion within four calendar years back will not benefit from tax discount.
  • In case of benefiting unjustifiably, discounted amount will be collected back without imposing any loss of tax punishment.

2018 Disability Tax Allowance

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engelli indirimi

Disability tax allowance amounts are determined depending on degree of disability by government every year in accordance with Article 31 of Income Tax Law No. 193.

Monthly amounts to be deducted from taxable income base in 2018 are as follows:

1st Degree Disabled Employee, who lost at least 80% of the working capacity will be benefiting from tax allowance of 1000 TRY monthly,

2nd Degree Disabled Employee, who lost at least 60% of the working capacity will be benefiting from tax allowance of 530 TRY monthly,

3rd Degree Disabled Employee, who lost at least 40% of the working capacity will be benefiting from tax allowance of 240 TRY monthly. 

2018 Taxable Income Brackets and the Tax Rates

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gelir vergisi dilimleri

One of the most important parameter in the calculation of wages is the income brackets and the tax rates applied to them. Withholding tax amount on the wages is calculated by taking into consideration the cumulative income tax base and the below rates which is determined for every year.

The new taxable income brackets and the tax rates to be applied in 2018 issued in Official Gazette duplicate number 30285, dated 29 December 2017 are shown below:

TAX RATE
TAXABLE INCOME BRACKETS
Up to 14.800 TRY 15%
For the 14.800 TRY of 34.000 TRY the tax is 2.220 TRY, in excess 20%
For the 34.000 TRY of 120.000 TRY the tax is 6.060 TRY, in excess 27%
For the 120.000 TRY of income over 120.000 TRY the tax is 29.280 TL, in excess 35%

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