Certain amendments, which are planned to be made on Social Securities and General Health Insurance Law numbered 5510 and Unemployment Insurance Law numbered 4447 with new draft law


1. Benefiting from employment incentives retrospectively

Although the employment incentives have entered into force in March, 2011, employers hesitated from benefiting those incentives for long periods since both the implementation was deemed as complex and also Social Security Institution did not develop a control infrastructure towards employers, which were intending to benefit from such incentives.

In addition, a significant increase has been observed in recent years in the number of companies, benefiting from incentives, thanks to activation of control inquiry towards users in the infrastructure of the Institution and increase in software, providing automatization with respect to incentive calculations. As it is known, retrospective benefiting of employers from employment incentives and refund of premium amounts has been suspended with the circular of Social Security Institution dated 18.03.2015. However, companies have resorted to judgement with respect their retrospective incentive refund requests and judgement processes have been resulted in favour of taxpayers recently.

It shall be possible for employers, who did not benefit from incentives although they met all the requirements in previous periods from the date of execution of related law, to receive refund in terms of incentive amounts thanks to new draft law, which is planned to be implemented. Refund applications can be made within one months as of the beginning of month following the effective date of related provision of the Law and applications, made out of the determined period, shall not be accepted.

Hence, one of the purposes of the regulation is mentioned as elimination of retrospective financial uncertainty in the legislative intention of the related article of the Law. On the other hand, it is aimed to reduce the financial pressure on Social Security Institution since it is anticipated to finalize ongoing lawsuits and expand incentive payments in 3 years period and even make a deduction from liabilities before the payment.

The table below demonstrates the impact of additional employment support, included in provisional article 10 of Law numbered 4447, which is one of the most advantageous employment incentives with respect to employers, on labour costs and retrospective sample calculation in terms of such support.


*It is assumed that the employer is employing 10 additional employee on average annually on the condition that meeting incentive requirements between 01.03.2011 and 31.12.2017 and average gross wage is TL 5.000,00. In order to be forethoughtful, it is considered that every 10 persons shall benefit from the incentive for a period of 12 months and in case the employed personnel number increases regularly in terms of months, the calculated incentive amount shall be higher.

2. What should the employers do?

Correction adjustments are required to be made within the periods determined in the Law, provided that the proposed law passes into law, for the periods of established support amounts through commencing analysis studies towards the determination of incentive amounts, which have not benefited by employers in previous periods, almost immediately.

Note: Draft regulation towards benefiting from employment incentives retrospectively has been submitted to Grand National Assembly of Turkey on 02.02.2018 and related article provisions may change as of the publication date of the Law.



Our explanations provided above include general information on the issue. No responsibility can be claimed against EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. due to the implications arising from the context of this document or emerging with respect to its context.

Best Regards,
Kuzey YMM ve Bağımsız Denetim  A.Ş.