The debt restructuring law, published in the Official Gazette and now in force, offers a 5-percentage-point reduction in social security contribution rates for those who restructure their debts. To benefit from this concession, applicants must submit their restructuring requests by the end of the year.
Incentives for Those Who Pay Debts Regularly
The recent debt restructuring law was published in the Official Gazette and took effect shortly thereafter. The recurrence of debt restructuring has caused frustration among those who already pay their obligations on time. These disciplined payers have requested measures that recognize and reward timely compliance. In response, a reward system was created for taxpayers and contributors who meet their obligations on time.
The first similar measure targeted employers who employ workers and was introduced in 2008. Under the 4A (SSK) scheme, the normal total contribution rate is 34.5 percent: 20.5 points paid by the employer and 14 points covered on behalf of the employee. For a worker earning the minimum wage, this typically translates to a contribution of 412 TL taken from the employee and 603 TL charged to the employer.
Employers and employees who pay social security contributions on time and have no outstanding contribution debts are eligible for a 5-point reduction in the employer share. Instead of paying 20.5 percent, the employer’s rate falls to 15.5 percent. As a result, the employer contribution for a minimum-wage worker decreases to 456 TL, saving the employer 147 TL per minimum-wage worker each month. For employers who pay contributions on maximum insurable earnings—about 7.5 times the minimum wage—the monthly benefit per employee can reach up to 1,102 TL.
5-Point Reduction for Bağkur Payments
A similar arrangement for 4B (Bağkur) contributors was introduced in 2016. Bağkur contributors normally pay a total contribution rate of 34.5 percent. Those who pay their social security contributions on time and have no outstanding debt can benefit from a 5-point reduction, lowering their effective rate to 29.5 percent. Bağkur contributors declare their own income base for contributions. A Bağkur contributor declaring earnings around twice the minimum wage would see monthly contributions fall from 2,030 TL to 1,736 TL under the 5-point reduction. Except for voluntary contributors and village heads (muhtars), all Bağkur participants without debt can benefit from this 5-point reduction.
Reduction Also Applies to Restructured Debts
Those who participate in the debt and contribution restructuring program are also eligible for a 5-point reduction. To qualify, there must be no outstanding contribution debt to the Social Security Institution; however, under the new restructuring law, individuals who enroll in restructuring and then pay the restructuring installments promptly and without interruption will receive the 5-point contribution reduction effective from the restructuring date.
Since 2018, taxpayers who file and pay their taxes on time have also been entitled to a 5-point reduction. In 2020, this benefit translated into a tax reduction of up to 1.4 million TL for eligible taxpayers. The tax reduction applies to those who are income taxpayers due to commercial, agricultural, or professional activities. To qualify, tax returns for the last three years must have been submitted within the statutory filing deadlines. Taxpayers who restructure their tax debts under the new law will also be eligible for the 5-point tax reduction, provided they pay the restructuring installments on time. Once they meet their obligations and begin paying without delay, they can start benefiting from the tax reduction within the relevant compliance periods. Applications for the restructuring program closed on December 31, 2020.