As of August, millions of employers are required to report their employees’ job titles and codes through the Muhtasar ve Prim Hizmet Beyannamesi (MUHSGK). Employers who fail to report accurate job titles and occupational codes will face fines. However, numerous problems in the system are already causing significant difficulties.
Muhtasar ve Prim Hizmet Beyannamesi Now Mandatory Nationwide
Previously applied only in pilot provinces, the Muhtasar ve Prim Hizmet Beyannamesi became mandatory across all of Turkey starting in August. Under the scope of the Law No. 6728, employers submitting declarations must now explicitly specify occupational codes. Although the law was enacted in 2016, full implementation was delayed because the supporting system was not fully developed. A pilot program started in 2017 and was expected to expand to other provinces by 2020, but delays—initially expected due to the negative effects of the coronavirus pandemic on business life—were followed by a decision to require occupational codes and job descriptions be provided in declarations as of August 2020.
Even though implementation is recent, various problems have already surfaced. While system changes often cause issues—especially when they affect many people—there are aspects of the new declaration process that are particularly burdensome for employers and payroll staff.
Penalties for Noncompliance
Beyond technical glitches, it is important to note mandatory requirements within the Muhtasar ve Prim Hizmet Beyannamesi that carry administrative sanctions if not fulfilled. Although reporting and updating employees’ occupational codes was previously required, employers were not fined for omissions or incorrect codes. Under the new system, however, failing to correctly report the occupation name and code can trigger penalties. Therefore, ensuring every code is accurately assigned is essential. If an employee files a complaint or an inspection reveals incorrect information, various sanctions may be imposed.
Employers must select job titles and codes that accurately reflect the employee’s actual duties from the İŞKUR occupational codes list and enter them into the system. If codes are reported incorrectly, fines are applied according to the relevant provision: for each workplace that reports an occupation name and code that do not reflect the truth, an administrative fine equal to one tenth of the current minimum wage per affected insured employee, up to a maximum of the monthly minimum wage, will be imposed on the employer.
Numerous Operational Problems in the System
There are several operational shortcomings in implementing the new system. Completing the required declarations currently takes considerable time. Employee records involve 32 tabs, there are 8 tabs related to income tax withholding incentives, 5 tabs for R&D withholding incentives, and many other sections—altogether more than 70 tabs in the interface. Navigating and completing all relevant sections can take at least 30 minutes.
Additionally, preparing the declaration offline and then uploading it as an e-declaration, followed by verification, can take more than 20 minutes. Other persistent issues include problems when generating accruals, changes implemented mid-year, insufficient protection of wage confidentiality, and a declaration interface that is not interactive and is overly cumbersome to use. These problems must be resolved promptly to enable employers who want to submit accurate and complete declarations to do so without undue burden.