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Amendments Made in The Scope of Labor and Social Security Law With Law No. 7420

Amendments Made in The Scope of Labor and Social Security Law With Law No. 7420

The MGC Legal team has summarized the amendments made to Labor and Social Security Law within the scope of Law No. 7420 for you; here are the details.

The law on amendments to the Income Tax Law and some laws and decrees was published in the Official Gazette on 09.11.2022. The law, which contains regulations affecting many areas of law, includes issues that are closely related to all of us. The extent of the Labor Law is as follows:

  • Income tax exemption for meals paid to employees by employers,
  • Abandonment of administrative fines that were applied but not collected during the pandemic period when Covid-19 was widespread,
  • Important issues such as exemption from taxation of wage payments for electricity, natural gas, and heating expenses that must be provided to employees by employers are included.

In the 2nd article of Law No. 7420, under the “Miscellaneous Exceptions” section of the Law No. 193, the “Registered Wages” clause is regulated in the 8th paragraph of the 1st paragraph of the 23rd article; in cases where employers do not provide meals in their workplaces or outbuildings, it is regulated that the portion of the daily meal cost for the days worked, which does not exceed 51 lira, is exempted from income tax.

The excess will be taxed as a fee if the payment exceeds this amount. The effective date of the article has been determined as 01.12.2022. With this amendment, income tax is exempted from the meals paid to the employees regardless of the purpose of use. Before the change, the requirement that the meal fee payment be made only to the taxpayers who provide food delivery service has been removed.

According to “Temporary Article” 1 of Law No. 7240, employers’ expenses for electricity, natural gas, heating up to 1000 TL per month, and other expenses will serve as the basis for premiums up until and including June 30, 2023. It is regulated that it is not included in the income, and income tax is not calculated on this amount. The Ministry of Treasury and Finance and the Ministry of Labor and Social Security have been authorized according to the procedures and principles regarding the application of the article. This arrangement has been temporarily decided.

Temporary article 32 has been added to the 14th article of the law with the amendment made in the Unemployment Insurance Law. In the “Provisional Article” 32, no responsibility can be placed on the Ministry of Labor and Social Security and the Employment Agency regarding the procedures regarding the receipt, evaluation, and payment of short-time employment applications made by employers due to Covid-19 due to coercive reasons, and cash wage support transactions.

With this regulation, in addition to the regulation that came with the law in November 2020, it has also been determined that the uncollected portions of the administrative fines that have not been collected as of the effective date will be canceled in cases where the employee benefiting from the cash wage support makes an application, and it is determined that the employee is actually employed by the employer during this period.

In other words, with the new regulation, if it is determined that the employee benefiting from the short-time working allowance and cash wage support payments due to faulty transactions and cash wage support is actually employed by the employer to whom the application is applied, the administrative fines applied to the employer will be collected as of the effective date of this article. Those who are not will be abandoned.

Collected items cannot be refunded or deducted. With the relevant regulation, those who have yet to be collected from the overpayments made due to incorrect notifications made by the employers during the short-time working and cash wage support processes will not be collected from the employers. Those that have been collected will not be refunded or deducted.

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