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Vergide Gündem
English Translation

Additional SSI premium risk for the staff

employed in free zones

Introduction

Free zones may be defined as places considered outside the customs territory
despite being within the national borders where some of the legal and
administrative regulations for commercial, financial and economic system applicable
in the country are not implemented or partially implemented, wider incentives
and advantages are provided for the enterprises operating in the country and
places that are considered physically separate from other parts of the country. The
exemption of wages of the staff employed in free zones from income tax is one of
the most important of these advantages. The implementation of this incentive has
been clarified by the Law no.6772 which was enacted on 24.02.2017. However,
in the circumstance that the incentives provided to employers are reflected to the
employees, it is not yet clarified whether or not they will be included in the income
taken as basis to SSI premium and it is seen as an important problematical area in
the future audits.

In this article, our purpose is to eliminate the hesitations about whether or not it
will be subject to SSI premium in the circumstance that the income tax withholding
incentive provided to the staff employed in free zones are reflected to the
employees and how to make notifications according to payment periods.

Inclusion of refunded amounts into the SSI premium base

The wages paid to the employees of the companies operating in free zones as
taxpayers exporting at least 85% of the FOB price are applied minimum living
allowance at first and then the income tax calculated over the remaining amount is
refunded to them as an incentive. In the circumstance that these refund amounts
are transferred to the employees, the concerning payments will become an
additional income for the insured by losing their tax qualification. In that case, these
additional payments are required to be subject to the income basis to premium by
being reflected on the gross wages.

Are SSI deductions from the refunded amount repetitive?

As widely known, the SSI premiums are calculated over the gross wage. For the
taxpayers transferring the benefitted income tax withholding to employees, an
additional premium cost is generated regardless of the payment on the net or gross
wage basis. In the practice of SSI, the amounts refunded to the employees are
considered as “a new income” and therefore they are not evaluated as a basis that
is applied repetitive premium.

When and how the SSI notifications will be made?

Since the companies operating in free zones, taxpayers exporting at least 85% of
the FOB price are eligible to benefit from these incentives; the taxpayers paying
that amount to the staff in advance during the year without waiting for the refund
are required to submit it to the SSI by including the relevant amount into the
monthly premium and service document (APHB) to be drafted for the concerning

Haziran 2019an 2019
10 Hazir