Last month, a significant change was introduced in declaration filings: the withholding tax returns and premium-service declarations that employers previously submitted separately to the tax office and the Social Security Institution (SGK) have been consolidated. From now on, these previously separate declarations are submitted together. This change also simplifies employer obligations for apartment managers and homeowners who employ domestic workers, providing a more convenient “easy employer” process.
Easy Employer System Introduced
Under the August 2020 regulation, the withholding tax return and the premium-service declaration are now submitted as a single combined declaration. Because taxpayers who withhold tax often rely on accountants or certified public accountants, some employers have experienced difficulties adapting to the new system. Apartment managers and people who employ domestic workers but do not withhold taxes themselves must complete their declarations on their own.
The Ministry of Treasury and Finance published a guide offering practical conveniences for those who fill out their own declarations. Under general rules for apartment administrations, a declaration must be filed for insured employees hired by the apartment. In this context, apartment managers or owners who file declarations themselves are instructed to leave the tax section blank. However, those who opt into the Social Security Institution’s recently launched easy employer application are exempt from submitting a separate declaration.
No Need to File Separate Declarations
SGK recently implemented the easy employer application, which removes the obligation to file separate declarations for those who qualify. Apartment administrations that wish to benefit from this system can apply easily through SGK’s platform by logging in with their e-declaration passwords. For employers within the scope of this application, accruals are generated automatically. To submit monthly documents or to make changes to automatically generated accruals, users must access the e-declaration application between the 21st and 23rd of the month following the relevant period.
Apartment administrations that transition to the easy employer system can also send their combined withholding and premium-service declarations via the e-declaration application. Those who do not choose the easy employer option will continue with the traditional filing method: they must apply to the competent tax office for the district where the apartment is located and establish a withholding tax liability. Their tax numbers must also be registered in SGK’s system. If tax numbers are not present in the registration records, declarations cannot be submitted. Consequently, apartment administrations that do not use the easy employer system may need to work with accountants or certified public accountants.
Conveniences for Domestic Service Employers
For employers who have insured employees providing domestic services, accruals are created automatically under Law No. 5510. These employers do not file combined withholding and premium-service declarations or pay stamp duty for employees who work no more than ten days per month at the employer’s home.
However, those who employ domestic workers under a workplace registration number and are not covered by Article 9 must submit insurance notifications; in other words, they must report via the withholding and premium-service declaration. Employers who prefer not to file a separate declaration and who wish to be covered under Additional Article 9 can apply to the easy employer program and complete all declaration-related transactions through the system. Adopting the easy employer system is especially helpful for those who do not want to work with an accountant or advisor.
Nevertheless, employers who are not required to withhold tax but still must report the earnings and service details that form the basis for employees’ insurance premiums are obligated to submit combined withholding and premium-service declarations to the tax offices in their region. Those whose income is taxed under the simple procedure must also apply to the tax office.