The Law No. 7440 on “Restructuring Certain Receivables and Amending Certain Laws,” dated 9 March 2023, was published in the Official Gazette No. 32130 on 12 March 2023 and entered into force on that date.
Under this law, receivables of the Social Security Institution (SGK) that are pursued under Law No. 6183 and that accrued for December 2022 and earlier months but remained unpaid as of the publication date of the law (12 March 2023) or by the deadlines specified in the relevant provisions of the law, as well as receivables transferred to SGK for collection, are included in the restructuring.
Legal Basis
You can read the provisions related to SGK receivables in Law No. 7440 below. For easy reference, the relevant provisions are listed.
ARTICLE 1- (1) The provisions of this Law;
c) Apply to receivables pursued by SGK collection offices under Law No. 6183 that have accrued by the publication date of this Law or by the deadlines specified in its provisions but remain unpaid, including:
1) Insurance premiums, retirement contributions and employer shares, unemployment insurance premiums, social security support contributions, and related delay penalties and default interest arising from insured statuses under subparagraphs (a), (b) and (c) of the first paragraph of Article 4 of Law No. 5510, for December 2022 and earlier months,
2) Optional insurance premiums and group insurance premiums for December 2022 and earlier months, together with delay penalties and default interest,
3) Insurance premiums and associated delay penalties and default interest calculated on shortfalls in labor costs determined by pre-assessment, investigation or inspection for special-type construction works and contract works completed on or before 31 December 2022,
4) Administrative fines applied under relevant laws for acts committed on or before 31 December 2022, together with delay penalties and default interest,
5) Stamp tax, special transaction tax and education contribution shares for December 2022 and earlier months, together with related default interest, where such receivables are pursued under the relevant laws.
The procedural rules for the law specify monthly change rates of the domestic producer price index (Yİ-ÜFE) and the late payment surcharge to be used in calculations. The law includes provisions on restructuring certain receivables, amendments to several laws, and the creation of new provisions.
Which SGK Receivables Are Finalized?
As stated in Article 7, receivables that relate to December 2022 and earlier months and that accrued before the publication of this Law but remain unpaid as of the publication date are covered as follows:
a) Insurance premiums, retirement contributions and employer shares, unemployment insurance premiums and social security support contributions arising from insured statuses under subparagraphs (a), (b) and (c) of the first paragraph of Article 4 of Law No. 5510,
b) Optional insurance premiums and group insurance premiums whose payment opportunities have not been eliminated under applicable legislation as of the application date under this Law,
c) Stamp tax, special transaction tax and education contribution shares pursued by SGK under the relevant laws.
If the calculated amount based on monthly Yİ-ÜFE change rates for the period from the end of the original payment deadlines to the publication date of this Law is paid within the periods and in the manner stipulated in the Law, all ancillary receivables such as delay penalties and default interest applied to these receivables are waived and will not be collected.
For special-type construction works and contract works completed by 31 December 2022 (inclusive), if the principal insurance amounts calculated on the labor shortfalls determined before the publication of this Law remain unpaid as of the publication date, the ancillary receivables (delay penalties and default interest) calculated for the period from their original start date to the publication date will be waived provided the Yİ-ÜFE-based amount is paid within the periods and conditions specified in the Law.
For administrative fines finalized before 31 December 2022 (inclusive) and unpaid as of the publication date of this Law, 50% of the principal fine and the Yİ-ÜFE-based amount calculated for the period from the end of the payment deadlines to the publication date will be accepted if paid within the time and manner set out in the Law; in that case, the remaining 50% of the principal fine and all ancillary receivables (delay penalties and default interest) will be waived.
If principal receivables within the scope of the article were paid before the publication of the Law but ancillary receivables remained unpaid as of the publication date, paying 40% of the outstanding ancillary receivable within the periods and in the manner specified in the Law will result in waiver of the remaining 60%.
Insured persons covered by subparagraph (b) of the first paragraph of Article 4 of Law No. 5510 and those under additional Articles 5 and 6 who restructure debts under this article will be reactivated for general health insurance provided they do not have unpaid premiums and premium-related debts older than sixty days, or if they do, such debts are already in installment or restructuring and being paid, and provided they pay the first installment of the restructured debt.
Those who have general health insurance registration under subparagraph (g) of the first paragraph of Article 60 of Law No. 5510 but never applied for an income test and who apply for the income test between the publication date of this Law and 31 July 2023 will have their general health insurance premiums assessed from the initial registration start date based on the income test result.
If unpaid premium debts falling under subparagraph (g) of the first paragraph of Article 60 of Law No. 5510 and accrued for December 2022 and earlier months are paid by 31 August 2023, all ancillary receivables such as delay penalties and default interest will be waived.
Those who, before the publication of this Law, had premium debts arising from the insurance status under subparagraph (g) of the first paragraph of Article 60 of Law No. 5510 may benefit from health services and other rights from the publication date until 31 August 2023 without considering pre-publication period debts, provided they meet the conditions set out in Article 67 of that law.
Amounts already paid up to the publication date for general health insurance premiums and related delay penalties and default interest under subparagraph (g) of the first paragraph of Article 60 of Law No. 5510 will not be refunded or offset.
Pre-assessment, Investigation or Inspection Stage Shortfall Premiums and Unfinalized Administrative Fines
Article 8 provides that for special-type construction works and contract works completed on or before 31 December 2022, if an application is made to benefit from this Law, the principal insurance amounts calculated on shortfalls identified by pre-assessment, investigation or inspection that were notified to the employer by the application deadline specified in Article 9(1)(a), and the Yİ-ÜFE-based amount for the period from the start of the assessed period to the publication date, if paid within the time and manner specified in the Law, will result in waiver of ancillary receivables such as delay penalties and default interest.
Similarly, administrative fines notified by the application deadline in Article 9(1)(a) and unpaid as of that date will have half of the principal fine and the Yİ-ÜFE-based amount for the period from the end of their payment deadlines to the publication date accepted if paid within the timeframe and method specified in the Law; in that case, the remaining 50% of the principal fine and all ancillary receivables will be waived.
If an application is made by the deadline in Article 9(1)(a), receivables under Article 1(1)(c) and those described in Article 10(4) and (5) that accrue by the first installment deadline specified in Article 9(1)(b) also benefit from the restructuring under Article 7.
Applicants seeking relief under Article 7 must, in addition to meeting the conditions specified in those articles, not have instituted lawsuits, must withdraw any filed lawsuits, and must not pursue legal remedies.
Common Provisions
Subject to the application and payment deadlines in the relevant articles of this Law, debtors who wish to benefit from these provisions must:
a) Apply to the relevant authority by 31 May 2023 (inclusive),
b) Pay the first installment of amounts due to the Ministry of Treasury and Finance, the Ministry of Trade, the Social Security Institution, provincial administrations, municipalities and YİKOB-affiliated collection offices by 30 June 2023 (inclusive); subsequent installments are paid in monthly periods in up to forty-eight equal installments at most.
If the last day of the application or installment payment period falls on a public holiday, the deadline ends at the close of the first business day following the holiday. Amounts calculated under this Law may be paid in installments or as a lump sum. If the entire calculated amount is paid in full within the first installment payment period, no coefficient is applied.
1) Ninety percent of the portion calculated using monthly Yİ-ÜFE change rates (including default interest calculated under Article 4) in lieu of ancillary receivables will be waived.
2) A 25% discount applies to administrative fines under Article 1(1)(a)(2) and Article 1(1)(d)(1).
3) If the payable amount after restructuring consists only of ancillary receivables, a 50% discount is applied to the Yİ-ÜFE-based calculated amount (excluding receivables covered by Article 7(4)).
When paying in installments, and subject to the provisions in the relevant articles, applicants must choose one of the installment options of 12, 18, 24, 36 or 48 equal payments at the time of application. It is not possible to pay over a period longer than the chosen installment plan.
The coefficients applied to calculated amounts for installment payments are:
- For 48 equal installments: 1.36,
- For 36 equal installments: 1.27,
- For 24 equal installments: 1.18,
- For 18 equal installments: 1.135,
- For 12 equal installments: 1.09.
The calculated amount is multiplied by the applicable coefficient and then divided by the number of installments to determine the monthly installment. Applicants are provided with a payment plan matching their chosen installment period. If payment is made in a shorter period than chosen, the payable amount is adjusted according to the coefficient.
Amounts owed under this Law by sports clubs registered with the Ministry of Youth and Sports, the Turkish Football Federation, or independent sports federations and active in Turkey, municipalities, and affiliated public legal entities may be paid in up to 120 equal monthly installments. The coefficients for these entities are:
- 12 installments: 1.09,
- 18 installments: 1.135,
- 24 installments: 1.18,
- 36 installments: 1.27,
- 48 installments: 1.36,
- 60 installments: 1.45,
- 72 installments: 1.54,
- 120 installments: 1.9.
The amount is multiplied by the applicable coefficient and then divided by the number of installments to determine the monthly installment.
For local administrations and institutions from which deductions are made under Article 7(2) of Law No. 5779 regarding sharing general budget tax revenues, amounts payable under this Law will be collected by monthly deductions from their shares of general budget tax revenue without applying the 40% rate in Article 7(4) of Law No. 5779. However, deductions under this scope cannot exceed 50% of the monthly share allocated to these administrations.
If deductions made under Law No. 5779 are suspended by the President, the installment payment periods are suspended for months in which deductions are not made and such suspensions are not considered violations under this Law. These installments will then be collected by deductions from the shares without additional coefficients or late payment surcharges. If the installment amounts exceed the monthly shares of these debtors, the shortfalls must be paid by the debtors by the end of the month following the installment payment period without late payment surcharges.
If payment by credit card is accepted under Article 41 of Law No. 6183 for amounts due to the Ministry of Treasury and Finance and SGK collection offices, banks facilitating the payment may reflect the debt as installments on the card and record it in the cardholder’s account in installment months; the payment date is the date the credit card is used and the debtor is issued a receipt showing collection. The period for banks to transfer such collected amounts to the Treasury or SGK accounts, as set out in Article 41 of Law No. 6183, is calculated from the day after the last day of the installment month. Paying installments by credit card under this paragraph does not prevent the application of the coefficient.