The “Proposal Law on Amendments to the Income Tax Law and Some Laws”, which includes not collecting income and stamp tax from the minimum wage amount of wages and salaries, was accepted at the General Assembly of the Turkish Grand National Assembly.
Accordingly, with the 18th paragraph added to the 23rd article of the Income Tax Law No. 193, “the remaining amount of the minimum wage after deducting the worker’s social security premium and unemployment insurance premium from the monthly gross amount of the minimum wage (4253.4 TL)” has been exempted from income tax.
In the same law amendment proposal, article 32 was repealed. In other words, the Minimum Subsistence Discount will not be implemented as of 2022.
If it is necessary to examine the bill in more detail, I will try to explain what needs to be done and the parameters to be taken into account in payroll calculation.
First of all, if we briefly touch on the issue of abolishing the Minimum Subsistence Allowance;
With the abolition of the Minimum Subsistence Allowance, many question marks in minds have been removed. In this way, the conflict of what kind of calculation will be made due to spouse and child status according to the Minimum Subsistence Allowance has ended, and this situation has become more advantageous for those working on gross wages. Regardless of spouse or child status, the deduction in Income Tax and Stamp Tax Exemption Amount will be added to the net wages of wage earners calculated from gross. However, since there is a Net Wage + AGI agreement for net wage workers, it will be seen in the coming days what companies will do about this situation in the new period.
Regarding not being charged income tax and stamp duty up to the Monthly Gross Amount of the Minimum Wage;
1- If we look at the description of the fee explained in Article 61 of the GVK;
“Wages are benefits that are provided with money and salaries given to employees in return for services in a particular workplace subject to the employer, and can be represented by money. Whether the wage is paid under the name of allowance, compensation, cash compensation (Financial liability compensation), allocation, raise, advance, dues, attendance fee, premium, bonus, expense allowance or other names, or is determined as a certain percentage of the earnings, provided that it is not a partnership relationship, does not change its nature.” It is said.
If we look at the change in the law, in Article 23 of the Income Tax Law, under the heading “Wages”, it is stated that “The following wages are exempt from Income Tax.” and an exception clause has been added as the 18th paragraph.
As can be understood from these two articles of law, since all taxable payments received by employees during the month are defined as wages, the amount that will be exempt will be based on the payments in that month, not the bare wage. In other words, the employee receives bonuses, travel allowance, etc. during the month. Amounts paid under any name are maximum within the scope of this exception. Exceptions can be made up to this amount. To explain in more detail; There is no day-based restriction or proportioning mentioned in the law article. Under normal circumstances, if there are no missing working days for a worker who is above the minimum wage or who receives the minimum wage, there will be an exception relationship with the net wage. However, let’s say for a wage earner who is underemployed during the month, his bare wage falls below the minimum wage, but there is also a bonus amount in the current month’s payment. Accordingly, I think that an exception can be made for bonuses up to the amount below the minimum wage. However, if there is a statement to the contrary with the Income Tax Communiqué to be issued, the situation may change.
2- In the Cumulative Income Tax Base follow-up, “while determining the brackets and rates in which the tax will be calculated in the taxation of wage income exceeding the exemption, the amounts within the scope of the exemption will also be taken into account.” It has been said. In other words, the current month’s GVM amounts deducted from the tax base will continue to be collected as the Cumulative GVM amount. Thus, when tax is calculated for employees who earn wage income over the exemption amount during the year, the tax to be calculated from the remaining GVM after deducting the exemption amount from the GVM in the current month will be calculated based on the rate of the tax bracket found over the “KGVM including exception” amount.
My personal opinion for this situation is; In the calculations made from Gross to Net and Net to Gross, the Income Tax Exemption amount must be included in the KGVM in the calculations made every month and must be followed accordingly. This will be a situation that needs to be taken into consideration, especially for those who receive net wages. When we look at the gross and net amounts announced for the minimum wage, we see that the gross amount is reached from the net wage in the exception logic. In other words, there are no Income and Stamp tax exemptions in the gross amount. Accordingly, in the same way, the wages to be calculated from net to gross are as in the gross minimum wage; Since the exemption amount for GVM will not be included in the gross amount, the exemption base in the current month should be kept in a separate item at the time of calculation and added to the GVM. This base will also not be fixed every month, and in case the amount is calculated to be less than the amount that can be benefited due to missing working days in some months, KGVM should be added by taking this into account. Thus, when income tax needs to be calculated in the following periods, the required income tax calculation can be made on the total amount (with the exception amount added), in other words, on the KGVM without discount. The important point here is that the amounts for which income and stamp tax will not be charged are defined under the heading of exceptions in the law. Therefore, I think it should not be thought of as a discount that will be calculated first and then deducted.
3- In cases where the value of the wage exemption amount is more than the amount to be calculated for the employee in the current month (due to lack of working days, etc.), it cannot be greater than the employee’s GVM amount.
4- For people receiving wages from more than one employer, this exception will only be applied to the highest wage.
5- New parameters to be used in the calculation;
– Income Tax Exemption Amount = The remaining amount of the minimum wage after deducting the worker’s social security premium and unemployment insurance premium from the monthly gross amount (4253.4 TL)
– Stamp Duty Exemption Amount = Gross Minimum Wage
Although when we look at it, it seems like the net and gross amounts of the minimum wage, GV and DV exemption figures from the wage have now entered our lives. My personal opinion is that these should be considered as separate parameters.
Özer Yılmaz
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