There are about ten different employer incentives in the social security and labour laws and regulations in Turkey. These incentives serve the purpose of encouraging growth and sustainability of employment.
Employers are eligible to claim the incentive for a percentage of the 'employer' SSI premium portion. This portion is then subsequently paid by the Treasury.
In cases where the insured employee is eligible under multiple incentive laws and regulations, employers are only allowed to apply for one – not every applicable – incentive and indicate the applicable law in their monthly premium declarations.
Until recently, it was possible for employers to change the applicable incentives on a monthly basis and demand a retroactive application / calculation of the most recent incentive.
The recent SSI circular dated 18/03/2015 puts an end to retroactive application of SSI incentives in cases where an employer applies to change one SSI incentive in lieu of another.
Hence, as of 18/03/2015, employers will not benefit from retroactive application of SSI incentives.
In the below-listed cases, retroactive application of SSI incentives for employers already benefiting from applicable incentives will continue to be processed:
- All requests done on or before 18/03/2015;
- Incentive for Government Tax Reliefs; Research and Development activities; Cultural and Entrepreneurial investments (based on certain conditions – see below)
In the application of the law enumerated 5510, Supplementary Article 2,
- Notifying the local SSI authority after obtaining the necessary documentation for the application of the said incentive from the ministry of Finance and its subsequent entry into the SSI online portal,
- In cases where the Ministry of Finance has approved the application of multiple incentives for a workplace, separate registration of the workplace for each incentive applicable,
- Registration of a ship as a workplace in cases where the shipyard benefits from the Government incentive for ship building investments,
- Application in writing to the local SSI office to furnish documentation indicating the approval of employer incentive for Research and Development activities from related authorities under the application of the law enumerated 5746.
- Submission of 'Cultural Investment Document' or 'Cultural Entrepreneurship Document' with Corporate Tax-Payer Status to the local SSI offices along with a declaration.
Provided that the above is undertaken by the employer, in cases where the local SSI offices:
- Do not undertake or is late in undertaking the registration of the work place,
- Do not upload the approved documents to the online system on time,
- Delay or omit dispatching required documents to the employer by the related Ministry,
employer's requests in changing the applicable incentive for the laws enumerated, 25510/16322/26322/05746/15746/25225/55225 in lieu of another will be admissible retroactively as there is no fault attributable to the employer.
It is unclear how the application of these recent changes will be received especially since the applicable laws and regulations prescribing the incentives do not contain any restriction for the retroactive application of SSI benefits. Given that the new directions are carried out by an administrative circular, it is likely that they will cause dissent. Updates will be posted on our site.