Legal News

2018 Minimum Wage Announced

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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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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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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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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%

Turkish Government is to Cover Half of the Newly Graduate Wages

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tll graduate artYou may pay half wage for every new graduate employee through a year, in case the proposed incentive is carried into effect in the forthcoming days.

In search of a solution for the growing unemployment rate amongst the young population, especially amongst the university graduates, Turkey has taken some steps to fight against unemployment. As a follow-up of these efforts, Labor and Social Security Minister Müezzinoğlu announced in a public meeting that government is preparing to launch a new incentive for the employers of new graduates by paying the half wage of the new graduates from the state funds during one year.

SSI Administrative Fines For 2017

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Administrative fines to be applied by the Social Security Institution are increased in 2017 in parallel to minimum wage hike. Amounts of the fines for the violations specified article 102 of Social Insurance and General Health Insurance Law No. 5510 are as follows.

Compensatory Work in Turkish Labor Law

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compensatory artIn case of bad weather and under some other circumstances that made working impossible, employer has the right to ask its employers to make up unworked hours at a later date. Also, the days unworked before and after holidays –especially the half-days before the Turkish religious holidays- may be considered in the same scope. However, this right of employer has some limitations; and monetary fines can be applicable in the cases of violating the provisions set forth in Law and Regulation.

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