SSI Incentives

At places of business where fifty or more workers are employed, employers are obligated to employ handicapped workers at a rate of three percent in private businesses, and handicapped workers at a rate of four percent and former convicts at a rate of two percent at public businesses. The positions that these persons are placed in must be appropriate for their professions, physical, and psychological conditions. When determining the number of employees for this rule, the total number of workers per city is considered. Handicapped workers cannot be employed in underground and underwater works, and the workers employed in underground and underwater works are not taken into consideration in determining the number of workers at the businesses pursuant to the provisions above. In the calculation of the ratio, fractions up to a half are not taken into consideration, whereas fractions equal to and higher to a half are rounded up to the next whole number.

To promote employment of handicapped persons through the incentive set out in Labor Law Nr. 4857, article 30, paragraph six.

Following the amendment introduced in article 30 of Labor Law 4857, in order to get entitled to the handicapped incentive, all insurants within this scope (whether employed within or above the quota, or whether employed on a voluntary basis or not) must be declared via monthly premium and service documents by selecting the law 14857.

It is necessary that insurants covered by this scope are entered in the system through the “Handicapped Incentive” program available in their e-Declaration systems, then, insurants who are registered in the system must be declared through monthly premium and service documents to be filed by selecting the law number 14857. The insurant’s contribution in the accrued premium and the portion of the employer’s contribution excess of the lower limit of the daily earning subject to premium must be paid.

Based on the provision of Law 5510, article 81, paragraph one, subparagraph (i), which states, "If insurance premium incentives granted by this subparagraph and those granted through other relevant legislation apply collectively for the same term, this incentive shall take precedence.” In the event that monthly premiums and service documents are issued by selecting the law number 14857, then, effective from March 2011, a five-point premium deduction can be benefited from based on the earnings up to the upper limit of the daily earnings subject to premium. Thereafter, the handicapped incentive can be benefited from based on the earnings up to the lower limit of daily earning subject to premium. However, the handicapped premium can only be benefited from at a rate which is found by subtracting the five-point portion from the employer’s contribution.

For each handicapped worker employed by an employer who employs handicapped persons above the quota as well as an employer who, though not obliged to employ handicapped persons, employs handicapped persons, the employer’s contribution corresponding to the insurance premium calculated at the lower limit of the daily earning subject to premium shall be paid in full by the Treasury according to the social security days within the relevant month.

Cultural enterprise: For the purposes of this law, means the operation of cultural centers or production, exhibition of, training, and education on any kind of cultural and artistic activity. The definition extends to the performance of scientific activities in relation thereto, and also the operation of the areas, structures or settings where such activities are carried out.

Cultural investment: For the purposes of this law, means the investment activities for the construction, technological infrastructure, or equipment of cultural centers and areas, structures or settings where any kind of cultural and artistic activity is carried out, exhibited, or taught and scientific activities related thereto are carried out.

To promote investment and cultural enterprises aimed at ensuring that cultural assets are kept active and utilized as elements contributing to the national economy. It also aims to boost the construction and operation of cultural centres.

The Ministry has the authority to allocate immovable properties for the cultural investments and enterprises within the scope of this law.

Investors that are subject to corporate taxes, or entrepreneurs who have a license within the scope of this law, can deduct %50 of the income tax during the investment phase to last no longer than three years, and %25 of the income tax during the operational phase to last no longer than seven years, from the tax accrued in their withholding tax return based on their monthly insurance payroll given to the administration for the wages of workers who will be working in the licensed investment or enterprise only. The principles and procedures regarding the application of this subparagraph are determined by the Ministry of Finance.

%50 of the employer contribution during the investment phase to last no longer than three years and %25 of the employer contribution during the business phase to last no longer than seven years, which are calculated over daily earnings subject to premium in accordance with articles 72 and 73 of Social Insurance Law Nr. 506, will be paid by the Treasury based on the monthly insurance payroll given to the relevant administration by the corporate tax paying investors or entrepreneurs who have a license within the scope of this law, only for the wages of workers who will work in the licensed investment or enterprise. Procedures and principles regarding the implementation of this subparagraph and the maximum number of workers a taxpayer can employ based on the nature of investment or business are determined jointly by the Ministry of Finance, Ministry of Labor and Social Security, and the Ministry with which the Undersecretariat of Treasury is associated.

Cultural investments and enterprises pay the water prices at the lowest tariff of the region where the investment or enterprise is situated. 20% of the electricity and natural gas costs of this investment or enterprise shall be paid by the Treasury for a period of five years.

Foreign specialist personnel and artists can be employed in licensed investments or enterprises with the consent of the Ministry and the Ministry of Interior following the granting of permission by the Ministry of Labor and Social Security. However, the total number of foreign personnel employed at any one time cannot exceed 10% of the total workforce. This rate may be increased up to 20% by the Ministry. Such personnel may start to work, at the earliest, three months prior to activation of the enterprise.

Licensed enterprises and other units within the scope of the license can continue their activities on weekends and official holidays during work hours specified in the license.

With article 24 of the Law published on the Official Gazette dated 26.05.2008

Nr. 26887 regarding Amendment of the Labor Law Nr. 5763 and Certain Laws, subparagraph (i) has been inserted under the first paragraph of article 81 of Law Nr. 5510, and with this, a five-point deduction has been granted for the employer’s contribution towards disability, old age and death insurance premiums payable by private sector employers (provided that there is no premium, administrative fine, or any default penalty or late fee in relation thereto owed to the Social Security Institution) and the amount corresponding to such deduction is paid by the Treasury.

5 points of the premium rate payable by the Employer is paid by the Treasury. Given that the employer’s pre unemployment insurance premium obligation is between 33.5% and 39%, this ensures a premium deduction of 14.9% to 12.8% in the employer's total insurance premium obligation.

The Ministry has the authority to allocate immovable properties for the cultural investments and enterprises within the scope of this law.

5 points of the premium rate payable by the employer is paid by the Treasury. Given that the employer’s pre unemployment insurance premium obligation is between 33.5% and 39%, this ensures a premium deduction of 14.9% to 12.8% in the employer's total insurance premium obligation.

It is essential that the monthly premium and service documents are submitted to the Institution in due course, that part of the insurance premiums corresponding to the insurant's share and that part of it corresponding to the employer’s share which is not payable by the Treasury are fully paid, and no premium, administrative fine, late fee, or default penalty related therewith is owed to the Social Security Institution.

This does not apply to businesses belonging to entities and institutions that are covered by the Law Nr. 5335, article 30, paragraph two, procurement and construction works that are carried out pursuant to the provisions of the State Tender Law dated 8/9/1983 Nr. 2886, Public Tender Law dated 4/1/2002 Nr. 4734 and international agreements, businesses regarding procurement and construction works which are exempt from the Law Nr. 4734, employees subject to social security support premiums, and insurants working abroad.

The objective of this law is to support and promote production of technological information, innovation in products and production processes, improvement of product quality and standards, increase of efficiency, reduction of production costs, commercialization of technological knowledge, development of pre-competition collaborations, technology-intensive production, entrepreneurship and investments in these fields in order to make the national economy internationally competitive. This is to be achieved through R&D and innovation, and will speed-up direct foreign capital inflow for R&D and innovation, and improve employment of R&D personnel and qualified workforces.

Income and corporate taxpayers who operate in the R&D Zone and their revenues exclusively derived from software and/or R&D activities in this Zone are exempt from income and corporate taxes until 31/12/2023. Taxpayers shall apply to their tax offices to benefit from this exemption. A document obtained from the managing company of the R&D Zone indicating that the taxpayer in question is located in the Zone, along with a document showing the scope of its activities, shall be attached to the application, or else the exemption in the scope of this subparagraph shall not apply.

This Law covers supports and incentives for technology centers formed by the Small and Medium Scale Industrial Development and Support Administration in accordance with the Law Nr. 3624 dated 12/4/1990 (technology center enterprises) and R&D centers in Türkiye, R&D projects, pre-competition collaboration projects, and technological enterprise capital.

Wages of R&D and support staff, except public servants, who are recruited in enterprises that function as technology centers; in R&D centers; in R&D and innovation projects supported public enterprises and establishments, or foundations that are founded by law or that use funds from international establishments or public enterprises and establishments under technological development project agreements to support R&D projects, or supported by international funds, or undertaken by The Scientific and Technological Research Council of Türkiye (TUBITAK); or in enterprises that are entitled to benefit from the capital support provided to technological enterprises; and in pre-competition collaboration projects, are exempt from income tax at a rate of ninety percent for staff with PhD degrees and at a rate of eighty percent for the other staff.

In calculating the number of support staff, fractional numbers are rounded up to the next whole number. If the number of support staff exceeds 10% of the number of total R&D staff, all tax exemptions shall apply starting with the wage of the support staff with the lowest gross wage. If gross wages are equal, support staff to whose wage any kind of tax exemption shall apply are determined by the entrepreneur firm where they work. In cases when the wages have to be grossed up, the gross wage is calculated without taking into account the tax incentives granted by the Law. All incomes obtained by R&D and support staff in the scope of this Law (wage, premium, bonus and similar payments) are covered by the scope of exception.

For the R&D and support staff, except public servants, who are recruited in enterprises that function as technology centers; in R&D centers; in R&D and innovation projects supported public enterprises and establishments, or by foundations that are founded by law or that use funds from international establishments or public enterprises and establishments under technological development project agreements to support R&D projects, or supported by international funds, or undertaken by The Scientific and Technological Research Council of Türkiye (TUBITAK); or in enterprises that are entitled to benefit from the capital support provided to technological enterprises; and in pre-competition collaboration projects, and staff whose wages are exempt from income tax pursuant to temporary article 2 of the Law Regarding Technology Development Zones dated 26/6/2001 Nr. 4691, half of the insurance premium calculated over the wages they earn in exchange for their labor shall be paid out of the allowance created in the budget of the Ministry of Finance.

• The worker must not have been employed in another business in the last 6 months;
• Men must be older than 18 and younger than 29, and women must be older than 18 years of age;
• The business must not have any outstanding premium debt and or administrative fines;
• If the worker worked for another employer in the past, such employer must not have benefited from the incentive number 611 for that worker;
• The worker must have been employed in addition to the average number of persons in the 6-month term prior to his/her date of recruitment;
• An incentive check must be carried out on the SGK (SSI) system for the worker, and an approval must be given via the system if appropriate;
• The incentive number 6111 can be benefited from for actual works.

In all incentive practices, a deduction is applied at a rate calculated over the employer’s premium rate which remains after deducting the 5% Treasury discount, with the exception of unemployment insurance.

15.5% which remains after deducting the 5% Treasury discount from the 20.5% employer’s contribution with the exception of unemployment insurance also gives the deduction rate pertaining to incentive number 6111.