Recent development

On September 11, 2014, Turkey introduced a limited-time amnesty for certain types of social security debts. An employer wishing to take advantage of the program must apply to Turkey's Social Security Institution ("SSI") by the end of 2014.

Debts subject to amnesty

To participate in the program, the unpaid social security obligations must have:

  • arisen before May 2014,

  • become due and payable before September 11, 2014, and

  • not already been paid.

Amnesty benefits

Although the premiums due are not reduced, accrued default interest on unpaid premiums and default penalties are forgiven upon payment of an amount determined by the SSI based on the producer price index exchange ratio.

50% of the administrative fines due for violations occurring before April 30, 2014, and 100% of the default interest on accrued fines are forgiven upon payment of 50% of the administrative fines, together with an amount determined by the SSI based on the producer price index exchange ratio.

Natural person shareholders in limited liability companies and members of boards of directors holding shares in a joint stock company are also eligible to participate by paying their individual social security debts by December 31, 2014.

Conditions for amnesty

  • Applications must be submitted by December 31, 2014.

  • The first installment must be paid by January 31, 2014.

  • Employers cannot initiate lawsuits with regard to the debts subject to amnesty and current lawsuits must be dismissed.

Payment terms

Debtors can pay their debts in a lump sum or they can choose to restructure the debts. Restructuring allows an employer to pay its debts in six to 18 installments. Installments are calculated based on the number of installment multiplied by a coefficient between 1.05 and 1.15. The more installments the debtor wishes to make, the higher the coefficient:

  • 6 installments: 1.05

  • 9 installments: 1.07

  • 12 installments: 1.10

  • 18 installments: 1.15

Failure to pay the debt in accordance with a restructuring plan, i.e., payment default, results in the loss of amnesty, with all amounts previously unpaid, including default penalties and interest, becoming immediately due and payable.

Actions to consider

Employers who have unpaid social security obligations and meet the conditions set out in the law should consider applying to the Social Security Institution as soon as possible to obtain the full benefit of the new law.