Legal News


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This year’s holy fasting month of Ramadan has started on May 16; and like previous years we are having questions about meal allowances and other benefits provided in Ramadan.

While fasting employees are fasting and not having lunch, some employees are not fasting and continue to have their lunch during the month.

First of all there are no special arrangements for fasting and non-fasting employees in Turkey’s legislation. And it should be bear in mind that as per the Turkish Constitution and Labor Law there can be no discrimination amongst people or employees based on religion and sect. i.e. no discrimination between fasting and non-fasting employees.


* Meals provided by employers in the premises of a company or through a restaurant or a caterer are exempt from income tax and not subject to social security premium contribution. However as fasting employees don’t have lunch, some companies stop giving meal in their premises and chose to provide their fasting personnel with what can be called "Ramadan Packets" which consist of basic food items.

* In this case, providing Ramadan Packets are regarded as benefits in kind according to Social Insurance and General Health Law, Article 80 and should not be taken into account in calculation of earnings subjected to SSI premium. But total net invoice amount of supplied foodstuff is subjected to income tax, as per Income Tax Law, Article 63.


* If an employer chooses to pay in cash for the meal, this payment is considered as part of the wage and is subject to income tax as per Income Tax Law, Article 61.

* Mail cash allowance is reducible only from daily earning subjected to premium up to an amount not exceeding 6% of daily gross minimum wage valid in relevant month (4,06 TRY for 2018). Exceeding part is subject to premium contributions.


* Instead of providing meal allowance in cash or supplying foodstuff, employer may choose to provide employees with meal vouchers or checks enabling them have their lunch outside of workplace. And again these vouchers or checks regarded as benefits in kind are not subject to premium contribution.

* With regard to tax liability there is an exemption, for the virtually worked day in the year 2015, daily amount of meal voucher/check up to 13.00 TL is exempted from tax. (Not including the amounts paid for meal voucher/check not related to virtually worked day.)

* This exemption is applicable only for the meal vouchers/checks used on meals and belonged to virtually worked days. Where they are spend on products other than meals and foods, the amounts paid for them must be considered as part of the wage and must be subject to income tax.


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President Erdoğan, speaking in an ınternational student gathering last week, announced that all guest students will be granted work permit, and they can renew the residence permits in their permit own universities.

Also they can get their general health insurance without waiting three months.

Erdoğan point out that there are 115.000 visiting student in the country in the scope of Turkey Scholarship Program, and Turkey aims to increase that figure up to 350.000, and also wants to continue the relationship with these students after graduation.

The promises for the guest students are briefly as follows.

* Both the students and graduates can obtain work permit,

* Guest students have to wait to renew their residence permits; however they will be able to renew these permits in the universities they are studying in.

* They can be registered in general health insurance without waiting three months


Work permit for foreign students are arranged in article 19 of International Workforce Law No. 6735.

* Foreign students enrolled in formal education programs at universities or higher education of Turkey may work provided that they obtain work permit.

* Those receiving education at the level of two-year degree or undergraduate study may apply for a work permit after completing their first year and work part time in accordance with Labor Law No. 4857 of 22 May 2003. This restriction is not applicable to postgraduate students enrolled in formal education programs.

* Work permits granted to foreign students will not cancel their valid student residence permit and the rights it provides


* Foreigners applied to receive or already receiving vocational training with an employer are in the scope of work permit legislations.

* Students arriving within the scope of the European Union Education and Youth Programs are exempt from work permit.

* Foreigners who are specified as exempt from work permit in other laws and international bilateral and multilateral agreements and conventions to which Turkey is party may work or be employed without obtaining work permit.

* The foreign students who wish to receive vocational training have to bring their internship file from their school, and not exceed the determined training period.


Tax and SSI Premium Debts to be Restructured

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Many of the public receivables, accrued before 31 March 2018, related to taxes and social security premiums, and subsidiary receivables associated with them will be restructured.

After Turkish PM Yıldırım has announced his government's economic package that contains social reforms and restructuring of some public receivables including SSI premiums and tax debts on Monday this week, the “Draft Law on Restructuring Some Receivables,” has been accepted in Plan and Budget commission and expected to get through Parliament well before the elections that will held on June 24, 2018.


The law will be applicable to following receivables provided that they accrued before 31 March 2018;

* All types of taxes and tax penalties,

* Administrative monetary fines

* Insurance premium, group insurance premium, pension deduction and institution's contribution, unemployment insurance premium, social security support premiums and subsidiary receivables associated with principles receivables (penalties, default interests and late,)

* Customs duties,

* Estate tax,

* The motor vehicle tax and their tax penalties, default interests and late fees.


Only the "Domestic PPI" applied amount of principle receivable will be collected, and delay penalty and default interests will be waived.

In the collection of receivables; Monthly Change Ratio of Domestic Producer Price Index (Domestic PPI / Yİ-ÜFE) will be applied to principal amount of;

"Insurance premium, pension deduction, unemployment insurance premium, social security support premium, irredeemable voluntary insurance premium and group insurance premium, general health insurance premium, and SSI related stamp tax, special transaction tax, and contribution to education" receivables accrued before 31 March 2018

However, the delay penalty and default interests (subsidiary receivables) applied to these principle amounts will not be collected, provided that PPI applied amount of principle receivable is paid.

In short, the amount to be collected = principle amount of receivable*PPI.

The same will be applied to social security support premium receivables, accrued on or before 31 March 2018, related to retired persons who continue to work independently.

Debts may be paid bimonthly in 6-9-12-18 equal installments. First installment and advanced payments should be paid until 31 August 2018.


Half of the principle amount of receivables related to unpaid administrative fines imposed for the acts conducted before 31 March 2018 will be deleted. In other words, "Domestic PPI" will be applied only to half of the principal amount of administrative fine.


Similar principles, such as Domestic PPI will be applied to tax receivables. We will inform you in details when the application circulars are issued.

Combined SSI and Tax Declaration Starts on July

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We would like to remind you that, starting from 1st of July 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 submitted only to the tax offices until the 23rd of the following month.

Pilot application of Withholding Tax and Monthly Premium Service Document has already started as of 1st of January in some of the regions. Now this combined declaration will take start all over Turkey as of 1st of July.


As far as the employees of a workplace concerned, withholding tax is income tax withheld from employees' salaries and paid directly to the tax office by the employer.

In Turkey, filing of withholding tax returns is a job only for the Certified Accountants as per their special law. For this reason payroll companies generally calculate the withholding taxes related to employees but don't make tax filing.


Employee and employer share of SSI contributions are notified online to authorities by "Monthly Premium and Service Document by the 23rd of following the month document belongs to, and premiums should be paid at the end of following month.

Also there are different time limits for notification of new starters and leavers.


In current application the social security premium declarations and tax returns are dealt with by different departments of a company. It is important to put these units in a good cooperation.

There is also problem of wage confidentiality principle.

Datassist experts are working to find solutions for such problems that can be faced in the application.

We will further inform you in the coming days.

No Missing Day Document Submitted to SSI

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In missing day declarations employer’s statement will be taken as basis. Starting from March declaration period there will be no obligation of submitting (EK: 10) form and documents.

As is known, the workplaces with less than ten employees were under the obligation of submitting (EK: 10) form together with the documents showing the reason of missing days. Workplaces employing ten or more personnel were only declaring the missing days without obligation of submitting documents of proofs regarding missing day reason (sickness reports, unpaid leave etc.)

Now with the article 67 of Law number 7103 issued in Official Gazette duplicate number 30373, dated 27 March 2018, this obligation has been removed. All establishments regardless of their number of personnel will only declare the missing days in their monthly premium and service document, but don’t submitted documents related to reason of missing day.

However, these documents will be kept in the workplace and be presented within 30 days when required by the SSI.


In Turkey’s legislation, number of working days within a month is considered 30 regardless of the actual number of days in the month. In other words, workdays of January (31 days), February (28 or 29 days) or March (30 days) is the same. Thus, fully worked employees’ insurance days must be declared as 30 days.

An employee may be absence from work for various reasons (sickness, unpaid leave, disciplinary penalty). Normally these days are deducted from 30, however in February unworked days should be deducted from 28 (or 29 in every four years period).

Minimum Wage of Foreign Employees

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Minimum wage to be paid to Foreigners employed with work permit is determined by Labor and Social Security Ministry according to their positions and competence.

As is known minimum wage for Turkish citizens are determined by a special committee. However the salary of a foreign employee cannot be less than the following.

* 6.5 times the minimum wage amount, for senior executives and pilots as well as engineers and architects requesting preliminary permit

* 4 times the minimum wage amount, for unit or branch manager as well as engineers and architects

* 3 times the minimum wage amount, for persons to be employed for jobs requiring expertise and proficiency as well as teachers

* 1.5 times the minimum wage amount, for persons to be employed for home services and other occupations.

2 times the minimum wage amount, for masseurs, masseuses and SPA therapists, occupations requiring expertise and proficiency, by tourism establishments

Is There Any Premium Support for Cultural Investments and Initiatives?

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Yes, the Law on the Encouragement of Cultural Investments and Initiatives No. 5225 provides SSI premium support for Establishments that have “Culture Investment License” and “Culture Initiatives License”

As per the article 5 of above said law,

* 50% of the employer’s SSI premium share calculated over the earnings of employed workers at the workplace that have Culture Investment License for 3 years,

* 25% employer’s SSI premium share calculated over the earnings of employed workers at the workplace that have Culture Initiatives License, for 7 years.

will be met by the budget of The Ministry of Culture and Tourism.


* E declarations must be submitted to SSI within the legal period.

* Establishment must be a corporate tax payer.

* Must obtain “Culture Investment License” or “Culture Initiatives License” from The Ministry of Culture and Tourism.

* There shouldn’t be any overdue premium debts.


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