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02December2014

Restructed Payment Options for Tax and Other debts within the Scope of Bill Omnibus nr. 6552

RESTRUCTURED PAYMENT OPTIONS FOR TAX AND OTHER DEBTS WITHIN THE SCOPE OF BILL OMNIBUS NR. 6552

6552 enumerated 'Law regarding the restructuring of certain receivables with the changes in the labor law and other laws and enactments' has been published in the Reiterated Official Gazette and entered into force on the date of publishing. With the Bill Omnibus, which includes 146 articles, many regulations have been subject to important changes. This article consists of briefing regarding the imposed regulations on tax and other debts. Click here to find out about the changes in labour law.

OVERVIEW

Debts and Penalties subject to restructured payment options:

  1. Public Receivables (Overdue debts owed to the government)
  2. Undeposited cash balances and receivables from shareholders
  3. Overdue SSI premiums
  4. Membership fees due to professional associations
  5. Membership fees due to the Union of Chambers and Commodity Exchanges of Turkey (TOBB)
  6. Membership fees due to Tradesmen and Craftsmen's Association
  7. Overdue vehicle inspection penalties
  8. Customs tax penalties

1. Public Receivables

Scope:

  • Tax debts, interest and penalty fees dating to 30/04/2014 (inclusive) and back;
  • Declared tax debts, interests, penalties dating to 30/04/2014 (inclusive) except for 2013 fiscal year income tax 2nd installment;
  • Monetary fines such as military, tolls, elections, transportation, traffic violation fines dating to 30/04/2014 (inclusive) and back;
  • Property and green tax debts, interest and penalty fees and contribution fees due prior to 30/04/2014;
  • Municipality receivables for water and sewage due prior to 30/04/2014;
  • Monetary fines given by RTUK (Radio and Television Council of Turkey);
  • Remaining public receivables overdue since 30/04/3014 subject to law nr. 6183 on the collection procedure of public receivables.

Eligibility:

  • Not to have taken court action for the public receivables in question, or to withdraw the legal action;
  • Not to be making restructured installment payments under the scope of law nr. 6111;
  • To make an application for restructured payments until 30/11/2014 to the relevant municipality or tax office;
  • To pay the restructured amount in full or up to 18 equal installments, paid every two months;
  • If paying in installments, to pay the first installment by 31/12/2014 the latest;

Note: Non-payment of two or more installments in a year or incomplete payment will result in loss of the right to restructured payment.

Calculation:

All interests, late fees and penalties will be restructured calculated based on the Domestic Producer Price Index ratio, declared on the month of the execution date of the Omnibus Bill (11/09/2014).

50 % of tax penalties amounts that are not associated with tax debts may be completely waived provided that a) they are overdue by 11/09/2014 b) the remaining 50 % is paid in full.

As one can see, the bill calls for restructuring of debts and not exactly a 'tax amnesty' - the principal amount for tax debts still need to be paid! The subject of restructuring is solely interests, penalties and late fees.

In cases where the principal tax debt or public receivable is paid in full by 31.12.2014, interests, penalties and late fees associated with the debt will be waived.
However in cases where the principal tax debt or public receivable is restructured with the option to pay in installments, the additional below rate will be added to the full amount, depending on the amount of installments:

Installment Options RATES                   
6 Installments 1,05
9 Installments 1,07
12 Installments 1,10
18 Installments 1,15

 

2. Undeposited Cash Balances and Receivables from Shareholders

All undeposited cash balances and receivables from shareholders declared in the company balance sheet dated 31.12.1013 must now be declared in a petition to the relevant tax Office by 31/12/2014 the latest, and paid during the tax petition period with the applicable 3% tax rate.

Income taxpayers cannot benefit from this provision.

3. Restructuring of SSI Premium Debts

Scope:

Overdue SSI Premiums related to April 2014 and prior:

  • All SSI premiums ( 4/1-a, 4/1-b, 4/1-c) and unemployment premiums and social security support contributions
  • Voluntary retirement and collective insurance premiums
  • Related stamp tax and education contribution taxes
  • Incomplete labour premiums for construction projects within the scope of government tender and bids, which are overdue since 30/04/2014.
  • General Health Insurance Premiums

Eligibility:

Application deadlines:

For the restructuring of the General Health Insurance Premiums: 30/04/2015 (application deadline to the relevant authority) and 31/05/2014 (first installment due date)
Remaining debts: 31.12.2014 (application deadline) and 31/05/2014 (first installment due date)

Calculation:

Interests, penalties and late fees associated with the principal debt amount will be calculated based on the Domestic Producer Price Index ratio.

Administrative fines:


50 % of administrative fines amounts may be completely waived provided that a) they are overdue by 30/04/2014 b) Interests, penalties and late fees of the remaining 50 % is restructured based on the Domestic Producer Price Index ratio and c) the remaining 50 % is paid according to the repayment plan.

In cases the principal amount of the public receivables is paid in full by 11/09/2014 and the 40 % of the interests, penalties and late fees is paid within the first installment deadline, the remaining 60 % will be waived.

Refer to the above table for installment options and applicable rates.

4. Membership fees due to professional associations

Certified Public Accountants and Sworn-in Public Accountant Association fees are subject to restructuring, albeit slightly different from the above-mentioned categories.

  • Interests, penalties and late fees will be waived in cases where the principal amount is paid in 9 equal installments (first installment due date: 01/10/2014).
  • In cases where the principal amount is paid in full or partially before the publication of the bill Omnibus nr. 6552, interests, penalties and late fees incurred will be waived in full - or waived partially.
  • Application Deadlines: 11/09/2014 to 30/10/2014.

5. Membership fees due to the Union of Chambers and Commodity Exchanges of Turkey (TOBB)

Association fees and related contribution fees can be restructured according to the following:

  • Interests, penalties and late fees will be recalculated based on the Domestic Producer Price Index ratio.
  • Restructured amount + Principal amount can be paid in 8 equal payments, paid quarterly. First payment due date: 31.12.2014
  • If the total restructured amount is paid in full by 31.12.2014, a 10% discount will be applied.
  • Application deadline: 30.11.2014

6. Membership fees due to Tradesmen and Craftsmen's Association

Membership fees and related contribution fees can be restructured according to the following:

  • Interests, penalties and late fees will be recalculated based on the Domestic Producer Price Index ratio.
  • Restructured amount + Principal amount can be paid in 8 equal payments, paid quarterly. First payment due date: 31.12.2014
  • If the total restructured amount is paid in full by 31.12.2014, a 10% discount will be applied.
  • Application deadline: 30.11.2014

7. Overdue vehicle inspection penalties

Subject to the Highway and Traffic Law nr. 2918, vehicle owners must ensure the inspection of their vehicles by 31/12/2014 the latest.

The 5 % monthly late fee for non-payment will be restructured with the Domestic Producer Price Index Ratio to be calculated until the publication date of the Bill Omnibus (11/09/2014) and 1 % for the consecutive months
Payments already made prior to the publication of the Bill Omnibus will not be subject to refund.

8. Customs Tax and Penalties

  • Interests, penalties and late fees associated with the principal customs tax amount will be restructured by calculation of the amounts based on the Domestic Producer Price Index ratio.
  • 50 % of tax penalties amounts that are not associated with tax debts may be completely waived provided that a) they are overdue by 11/09/2014 b) the remaining 50 % is paid in full.
  • Restructured amounts may be paid n 8 equal installments, to be paid every two months.
  • First installment due date: 31.12.2014
  • Application deadline: 31.11.2014

Posted in Social Security Law and Legislation, Taxation Law

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