The omnibus law has finally come into effect. Its final version affects millions and specifically addresses Social Security Institution (SGK) tax restructuring. So, what does the Law No. 7143 restructuring of SGK tax debts cover?
Which Debts Are Included in the Restructuring?
- Social insurance premium debts
- Voluntary insurance premium debts
- Group insurance premiums
- Student loans
- Property tax
- Education contribution fees
- Environmental tax
- Social security support premium (applied between 2003 and 2016)
- Income tax
- Special transaction tax
- Value Added Tax (VAT)
- Motor vehicle tax
- Unemployment insurance premium
- Stamp duty
- Military monetary penalties
- Administrative fines
- Pension deductions and employer share
- Traffic fines
- Water bills
- Debts of 100.00 TL or less that matured before December 31, 2013
All the debt types listed above are valid answers to the question “what does SGK tax restructuring cover?” The most important detail is that these debts must originate from dates earlier than March 31, 2018.
Where Should I Apply for Restructuring?
If your debt relates to tax offices, you should apply to the relevant tax office. You can also use the e-Government (e-devlet) portal for many procedures. If your debt is to SGK, it is best to apply in person or by mail to provincial or district SGK directorates. If you cannot visit in person, you can use the Revenue Administration’s official website to submit your application.
What Are the Payment Options Covered by SGK Tax Restructuring?
You have two main options. If you have a lump sum, you can pay in full. Alternatively, you can choose installment payments over 6, 9, 12, or 18 months. Payments under the omnibus law are made every two months rather than monthly. The most important point is to respect payment deadlines: missing a due date will cancel the restructuring and require you to pay the full outstanding amount immediately.
What About Discounts for Lump-Sum Payments?
If you pay in full and there are no other obstacles, you are likely to qualify for substantial discounts. Since discounts are applied to interest or penalties rather than principal, you will still be required to pay the outstanding principal amount.
When Can I Start Paying?
- The first installment date for Social Security Institution payments was set as August 31, 2018.
- For debts of local governments, YİKOBs, special provincial administrations, the Ministry of Finance, and the Ministry of Customs and Trade, the deadline for installment payments was set as October 1, 2018.
What Are the Payment Conditions?
If you decide to restructure and prepare your budget, the state may offer discounts of up to 90% for lump-sum payments. For certain irregularity and procedural penalties, up to 50% of the penalty amount may be waived, provided it is not linked to the tax principal.
Additionally, resolving tax disputes through settlement can lead to reductions of around 80%. Pharmacies are also considered under this arrangement, with stock adjustments possible without penalties or interest in specific cases.
How Are Debts Calculated According to Yİ-ÜFE?
Debts incurred before March 2018 are restructured using Yİ-ÜFE (Domestic Producer Price Index) calculations instead of delay interest. The percentage reductions mentioned above are applied under this method.
For example, if you were charged 1,886.00 TL in delay interest, the law introduced a major relief so that only 50.00 TL may be required, with adjustments reflecting inflation figures.
Regarding the 50% reduction of penalties: monthly amounts will be calculated based on Yİ-ÜFE, with a rate of 0.35% applied per 30 days. If you choose to pay your debt in just two installments, you may benefit from the 50% reduction tied to Yİ-ÜFE.
For installment payments, the calculation follows the principle:
Principal + Yİ-ÜFE
As a result, multipliers are applied as follows to determine the final amounts:
- 6-month installments: multiplier 1.045
- 9-month installments: multiplier 1.083
- 12-month installments: multiplier 1.105
- 18-month installments: multiplier 1.15
Can I Change My Payment Option?
If you initially selected lump-sum payment and later want installments, or vice versa, you may change your payment option. The state allows such changes, but it will not permit extending the original installment period beyond the agreed term. Keep this detail in mind to avoid problems with your restructuring.
I Want to Pay Off the Debt Sooner Than the Agreed Term.
You can always pay off your debt earlier than scheduled. If you do so, the coefficient applied to your payment will be adjusted in your favor, reducing the total amount you owe.
I Restructured My Debt but Did Not Specify a Payment Option. What Happens Now?
If you benefited from restructuring but did not choose a payment option, the maximum installment period will be applied automatically to your debt.
What Happens with Payments Outside the Restructuring?
So far we have summarized what SGK tax restructuring covers. However, payments made outside the restructuring framework are not included. If you made unrelated or misleading payments toward SGK debts, those amounts will not be evaluated under the restructuring provisions.