Whether employees who pay insurance premiums through SSK can become taxpayers has become a frequently searched topic recently. Questions such as “Can an employee insured under SSK form a company?” and “If they do, which insurance branch will handle their premium payments?” are common for those who want to open their own business or become a partner in a company while still employed under SSK in 2021.
Opening a business, becoming your own boss, or having an additional source of income is a goal for many. This article explains how employees insured under SSK can become taxpayers and what types of companies they can establish.
How Can an SSK-Insured Employee Start a Company?
Many SSK-insured workers wonder whether they can start a business or become a partner in a company without leaving their current employer. There are specific conditions for SSK-insured individuals to become taxpayers. If the employment contract with their current employer contains a clause prohibiting the employee from establishing a company or becoming a partner, the SSK-insured person cannot register a company in their own name or become a partner while bound by that agreement.
However, if there is no such prohibition in the employment contract, under Article 53 of Law No. 5510, the individual may register a company in their own name or become a partner and thus become a taxpayer. If an employer’s contract explicitly forbids employees from establishing companies in their own name or on behalf of others, employers may dismiss employees who violate that term without paying severance.
If an SSK-Insured Employee Starts a Company, Which BAĞ-KUR Premium Will They Pay?
A common concern is which insurance branch will collect premiums when someone insured under SSK opens a business or becomes a partner. Many SSK-insured workers want to know whether they will owe BAĞ-KUR premiums if they open a separate workplace. If an individual registers a sole proprietorship or becomes a partner in a company while still employed under SSK, they do not automatically incur a BAĞ-KUR premium liability.
In cases of occupational disease or work accidents, the person is evaluated under BAĞ-KUR for benefit payments. Long-term and short-term benefits related to employment remain within the SSK insurance scope for those employed under SSK. If an SSK-insured person opens a business in their own name, they continue to be considered insured under SSK.
A transition to BAĞ-KUR only occurs if there is a lapse or interruption in SSK premium payments after opening a business in the individual’s name. There is no mandatory immediate transfer to BAĞ-KUR; only delays or interruptions in SSK premium payments will result in being evaluated under BAĞ-KUR.
If an SSK-Insured Employee Starts a Company, Can They Also Retire via BAĞ-KUR?
It is known that an SSK-insured person who starts a business does not immediately begin paying BAĞ-KUR premiums. If the person resigns or is dismissed from their insured employment, BAĞ-KUR premium obligations will commence. When SSK employment ends, social security coverage under SSK ceases and BAĞ-KUR premiums become payable.
Retirement for those who were insured under SSK will, in such cases, proceed through BAĞ-KUR if BAĞ-KUR contributions were later accumulated. However, if the SSK-insured person remains employed at their original workplace, they continue under SSK and do not pay BAĞ-KUR premiums; accordingly, they will retire through SSK rather than BAĞ-KUR. This is the practical distinction relevant to those asking whether an SSK-insured employee can form a company and whether that will result in BAĞ-KUR retirement.
How to Establish a Sole Proprietorship?
A sole proprietorship is one of the simplest company types and is often chosen by individuals. A sole proprietorship can be formed by one person or with a small number of partners. The typical steps to set up a sole proprietorship include:
- Collecting signature circulars, a copy of the identity card, signature registration statements, and residence documents.
- Registering the business name and completing registration formalities.
- Applying for a tax identification number.
- Purchasing and having accounting books certified.
- Finalizing and receiving the tax identification number.
- Preparing an inspection report (yoklama tutanağı) if required.
- Printing invoices, delivery notes, and expense vouchers.
- Publishing a company announcement in the trade registry gazette, if necessary.
- Obtaining a cash register plate and tax plate.
- Registering with the relevant professional chamber.
- Securing a business opening and operation license.
- Completing Social Security Institution (SGK) registrations.
- Completing BAĞ-KUR registrations when applicable.
Which Taxes Does a Sole Proprietorship Pay?
A sole proprietorship is treated as a taxpayer by tax authorities and must file declarations and pay taxes according to legal schedules. The main taxes a sole proprietorship may owe include:
Stamp Tax:
- Applies to documents listed under the Stamp Tax Law lists 1 and 2.
- Must be paid even if no other tax arises from the declaration.
Withholding Tax (Stopaj):
- Sole proprietorships that are required to withhold taxes must file withholding declarations.
- Employers declare and pay withholding at specified rates monthly or quarterly, depending on the type of payment.
Value Added Tax (VAT):
- Sole proprietorships must file VAT returns at regular intervals.
- VAT is mandatory and must be calculated and shown on invoices for taxable transactions.
- Rates vary by type of goods or services and are generally 1%, 8%, or 18% depending on the classification.
Preliminary (Interim) Tax:
- Profits and losses for relevant periods are declared quarterly via the Preliminary Tax Return.
- Preliminary tax is mandatory and reduces the annual income or corporate tax liability.
- Income taxpayers generally pay a 15% rate on preliminary tax, while corporate taxpayers pay 20%.
Income Tax:
- Sole proprietorships are subject to income tax.
- Annual income tax returns declaring the prior year’s profit or loss must be filed by March each year.
- Income tax rates are progressive and typically range from 15% to 35% depending on taxable income brackets.
How to Establish a Limited Liability Company (Limited Şirket)?
Limited companies are formed by real or legal persons and have a trade name and specified capital contributed by partners. According to regulations, a limited company can be established by a single partner or up to 50 partners. The minimum capital required to set up a limited company is 10,000 TL. You may wish to consult an accountant to prepare the necessary documents for registration.
Documents Required to Form a Limited Company
The documents commonly requested for establishing a limited company include:
- A written petition of establishment.
- The company establishment notification form.
- Notarized articles of association.
- Residence certificate(s) of partners.
- Chamber registration declaration.
- Bank receipt showing the paid-in capital.
- Lease agreement for the company address, if applicable.
Conditions for Forming a Limited Company
Certain items must be included in the articles of association when forming a limited company, such as:
- The company trade name and the location of its registered office.
- A clear description of the company’s business activities.
- The grouping and nominal values of capital shares.
- The names, titles, and nationalities of managers.
- The form and method of official announcements the company must make.
How to Form a Joint-Stock Company (Anonim Şirket)?
Forming a joint-stock company requires several key steps, including:
- Registering with the relevant chamber of commerce.
- Applying to the tax office to open taxpayer status.
- Specifying the company address and preparing a lease if applicable; defining the company’s articles of association, NACE code, and trade name.
- Signing the articles of association before a witness at the Trade Registry and submitting an imprint/signature declaration.
- Having an accountant obtain a provisional tax number from the tax office.
- Opening a company bank account with the provisional tax number and depositing a portion of the capital (typically one-quarter when required).
- Submitting applications to the trade chamber through a financial advisor.
- Preparing signature circulars and completing registration and certification of official ledgers at the Trade Registry.
- Obtaining the tax plate and completing tax authority inspections on the company address as needed.
Requirements to Establish a Joint-Stock Company
Key requirements for establishing a joint-stock company include:
- The company’s trade name and registered office address.
- A detailed definition of the company’s purpose and business activities.
- Capital structure, the nominal value of shares, and rules for payment.
- Whether share certificates are registered or bearer and any privileged shares or transfer restrictions.
- The valuation of non-cash contributions and the number of shares issued for those contributions.
- Amounts payable to founders for services rendered in establishing the company.
- Benefits allocated to board members, founders, and others from company profits.
- The structure and signing authorities of the board of directors.
- Procedures for convening general assembly meetings and voting rights.
- If applicable, the company’s duration and how official announcements will be made.
- Types and amounts of subscribed capital by shareholders and the company’s fiscal period.
- Appointment of the initial board members.
How Many People Can Establish a Joint-Stock Company?
A joint-stock company can be established by one or more real or legal persons. There is no strict upper limit on the number of shareholders; however, companies with 500 or more shareholders become subject to Capital Markets Board regulations.
Joint-stock companies must place a minimum initial capital—typically at least 50,000 TL. For companies using a registered capital system that permits capital increases up to a certain ceiling, the initial capital requirement may be higher, for example a minimum of 100,000 TL under those specific rules.
This article reviewed whether an employee insured under SSK can start a company and which insurance branch would apply for retirement purposes.