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temporarily assigned at a group company abroad would be Therefore, the job description of the person assigned for a
appropriate as per the legislation. task abroad should be handled both within the context of
national/international legislation and the decision for the
In that direction, whether there is an international social selection of country to notify on that person’s insurance
security contract or not, in the circumstances that an must be made in that direction.
employee, transferred to a group company abroad under
“temporary assignment”, works at that group company Assessment on the
more than 6 months and receives his actual wage from the Instrument for Pre-
group company during that period besides paying income tax Accession Assistance
concerning the mentioned payment abroad and remaining Framework Agreement
under the staff of the organization resident abroad; a between the Turkey and the
practice like “temporary assignment” cannot be in question European Union (IPA II) in
and submission of social security notifications by the actual terms of VAT
employer resident in Turkey would be considered as contrary
to the legislation. Instrument for Pre-Accession Assistance Framework
Agreement (IPA) is a mechanism formed by the European
In case an employee assigned at a group company abroad Union (EU) to support western Balkan states and Turkey
would not be working on behalf of the actual employer more efficiently. Projects supported through IPA mechanism
resident in Turkey for that period, termination of the state help candidates and potential member states prepare for the
of mandatory insurance will become a current issue. For EU standards.
those people, a disadvantage arising from the empty period
to occur on the social security system would be at stake. So Through the IPA II agreement, five components making
as to remove that disadvantage, an application for the other up the framework for the financial assistance in the initial
appropriate systems would be required. period of IPA I covering 2007-2013 have been maintained
and transformed into five policy domains that shape the
On the other side, it’s indicated within the Law no.5510 that financial supports concerning 2014 – 2020 fiscal periods.
people sent to Turkey by a non-resident company to work
on behalf of itself for a task that would not exceed three The projects undertaken particularly in the eastern parts
months, able to document his/her social security abroad will of Turkey within the scope of IPA I agreement are also
not be considered as insured in Turkey. The aforementioned handled in other parts of Turkey in line with the IPA II
three months period of exemption here is applicable for the agreement, exclusively on matters of “agricultural and rural
ones that are sent to our country temporarily by a company development” and “regional and cross-border cooperation”
established in a country without a social security contract as well as the eastern regions of Turkey.
and for the ones subject to the social security legislation of
the country of origin. In the Article 28 of IPA II Agreement it is indicated that
taxes, customs and import duties and/or charges having
Accordingly, for an employer sent to Turkey by a company identical impacts within the context of imports in connection
resident in a country where any social security contract with the goods supplied and/or services rendered and/
does not exist, to benefit of the three month exemption or tasks executed by the Union contractors under a Union
period within the scope of the Law no.5510; his/her being contract are not eligible under IPA II.
assigned for a particular, short time and specialty task in
Turkey while any relationship of employee-employer with the Accordingly, Union contractors intending to benefit from VAT
company resident in Turkey should not be installed. Within exemption within the scope of Framework Agreement should
that context, in the circumstance that the employee assigned be applying for “Certificate of VAT Exemption” and obtain it.
at the group company in Turkey documents his mandatory
insurance within his country of origin, he/she would be Since this regulation is of full exemption nature, incurred
exempt of social security premium payments in Turkey for VAT on deliveries and services subject to exemption is
three months. In case the temporary assignment period is refunded to Union Contractor and/or Provider in cash or
extended, the concerning employee’s insurance would be on account, in case the incurred VAT cannot be offset by
initiating following the submission of employment statement deduction.
to the Institute, as of the date that the three month period
expires. Explanations in this article reflect the writer's personal view on the
matter. EY and/or Kuzey YMM ve Bağımsız Denetim A.Ş. disclaim any
The legislation does not contain a clear regulation responsibility in respect of the information and explanations in the
concerning the principles of “temporary assignment” and “to article. Please be advised to first receive professional assistance from
work on behalf of the actual employer” that are mentioned the related experts before initiating an application regarding a specific
both within the Law no.5510 and the international social matter, since the legislation is changed frequently and is open to different
security contracts. This uncertainty could lead to “fake interpretations.
insurance” and may cause some incorrect practices that can
result in certain sanctions. In case those incorrect practices
are detected, administrative fines, removal of the right to
benefit from deduction incentives of five points for one year,
cancellation of the social security notifications with the
related people could be on the agenda.
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