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Legislation - CottGroup Holistic Business Services


Social Security System in Turkey


SGK = Social Security in Turkey

There is an e-declaration which is sent regularly at the end of following month, which is called “aylık hizmet bildirimi” in Turkish. As mentioned above, clients must provide the power of attorney regarding the password in case the payroll provider will communicate directly with this party. In case there is no edeclaration password a proxy letter is required instead. As mentioned above, the payment date is until the end of following month, and the local payroll provider will be able to pay the premiums on the client’s behalf, as explained above too. The total amount must be paid in local currency (TRL – Turkish Lira).

Bank payments are possible but the client must have a local bank account.

Liability for Social Security:

Social Security contributions are calculated on a monthly basis of monthly wages that are paid jointly by the employee and the employer. Please find below the rate percentages table;

14 %
19,5 %
Unemployment Contribution
1 %
2 %
15 %
21,5 %
5 %
Total Discount Included
15 %
16,5 %

**If the Social Security premium payments are made on time, the employer entitles to the discount.

The rates are applied to social security base which is comprised gross wages, bonuses, and other taxable payments. However there is a ceiling base which is 6360,90TL for the first half of 2013 and the first half of 2013 and 6639,90TL for the second half of 2013.

Posted in Social Security Law and Legislation, Taxation Law, Labor Law


What is MSD (AGİ) in Turkey

What is MSD (AGİ)

The Minimum Survival Discount (MSD) has been applied within the framework of principles determined in account of the tax to be paid by the employees in accordance with the income tax law. The calculated MSD sum is paid to the employee by being deducted from the income tax to be paid by the employee. The MSD sums are calculated by considering the marital status of the employee, number of children the employee is obliged to look after and the minimum wage determined at the beginning of calendar year, and amendments made in the minimum wage in a year do not cause any change in calculation of MSD. If employee's child is over 18 years old, the employee can not take advantage for him. But if the child is studying in university, the employee will be benefit from his child's age will be reached up to 25.

Posted in Social Security Law and Legislation, Labor Law


Advantages of Renting a Car for Employees

Advantages of Renting a Car for Employees / Şükrü Kızılot 11.04.2013

Renting a car for employees is not actually a new practice; yet, it became popular recently due to the advantages it brings.

The Differences Between Purchasing And Renting

There are many advantages to renting a car rather than purchasing one for the company and registering it. Let’s explain the subject and start with the purchasing activity.

1- Purchasing a Car for the Company

a) For the cars purchased within a certain year, it is not possible to amortize them for the year they were purchased, in other words, for 12 months. For the period between the month the car was purchased and the end of the year, it is possible to calculate the monthly amortization and record it as an expense (Article 320 of Tax Procedure Law).

b) The value added tax paid during the purchase cannot be subject to reduction. It can qualify either as an expense or a cost. (Law on Value Added Taxes Article 270/2)

Posted in Taxation Law

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