Mehmet Feridun Izgi
Bozoğlu İzgi, Istanbul
feridun.izgi@bi.legal

Introduction

Following the Covid-19 pandemic, the obligation of employers to ensure the health and safety of the workplace as well as for employees more generally, has become an essential issue. Initially, working remotely began to be applied during the pandemic to reduce risk of infection in the work place. As we emerge from the pandemic, working remotely has somewhat normalised and requests have started to come from employees regarding working from different countries. Such requests are of high importance due to the need to comply with different areas of law and requirements under each jurisdiction.

Since Turkey is a popular holiday destination, demands from employees to work in Turkey have increased markedly. There are essential aspects which need to be taken into consideration when allowing employees to work in Turkey. These relate to employment law, immigration law, and tax law. These core aspects must be considered separately.

Employment law implications

There are certain employer obligations that must be complied with when applying remote working practices in Turkey, which came into effect during the Covid-19 pandemic. According to the Remote Work Regulation (Regulation), agreements including provision of working from home must be in writing and the contract must include matters such as a job description, duration and location of the remote work, how the work is conducted, equipment to be provided by the employer and the obligations for the protection of such, methods of communication between employee and employer, etc. While the list appears a lengthy one, it is possible to regulate every aspect of it in a short employment contract.

In accordance with Occupational Health and Safety Law No 6,331 (Law No 6,331), employers are liable for ensuring occupational health and safety in the workplace. Situations such as protecting the health and physical integrity of the employee due to undertaking their job, taking the necessary measures regarding occupational health and safety, declaring employees’ rights, are included in the employer’s duty of supervision/protection. Due to the broad definition of ‘occupational accident’, technically any type of accident during working hours may give rise to the employer’s responsibility. From a general view, the employer may be held responsible for the compensation of the material and immaterial damages of the employee, and criminal liability for the representatives of the employer may also come into question if there is a fault regarding the fulfilment of health and safety obligations. It is therefore recommended to comply with the health and safety measures in accordance with the Law No 6,331 and the Regulation, to monitor employees’ state of health, to take necessary measures to ensure employees are instructed and given necessary training.

Tax aspects

Regarding the tax implications of this issue, double-taxation treaties between countries are of particular importance, and respective evaluation must be made taking into account each case’s conditions. According to income tax law, an employee may be exempt from income tax, provided the employer does not establish a workplace or head office in Turkey and if the employees’ salaries are paid in foreign currency from the employer’s income earned from countries other than Turkey.

In accordance with double-taxation treaties, the income derived by a resident of a contracting state from service conducted in the other contracting state will only be taxable in the first state, if certain criteria are fulfilled. In general, these treaties specify a time limit during which no income tax liability arises. This period is quite often determined as 183 days in total, in any continuous 12-month period, but may vary depending on the countries involved. There are also further conditions, such as the requirement of making payments by or on behalf of an employer who is not a resident of the other contracting state and not making payments from a permanent establishment or constant place owned by the employer in the other contracting state. As these requirements are specifically regulated under the double-taxation treaties, each case requires separate evaluation based on the double-taxation avoidance treaty.

Social security liabilities

The obligation to pay social security contributions arises when the employer is based in Turkey. Whether or not it is a requirement to enrol the employee into the Turkish social security system should be determined by whether there is a social security agreement between Turkey and the country in which the employee is currently insured.

If there is such an agreement between the two countries, evaluation must be made according to the provisions of the agreement. From a general point of view, there are specific time limits set within these agreements for temporary assignments in which the obligation to enrol employees into the Turkish social security system does not arise. If there is no such agreement, then the provisions of the Law on Social Security and General Health Insurance will apply. In which case, there is no need to enrol an employee for an uninterrupted duration not exceeding three months, provided that the employee is assigned to Turkey by any organisation established in a foreign country as well as if that person can prove that they are subject to social security in a foreign country.

In both situations explained above, when the time limit in the agreements expires or after three months if there is no agreement, enrolment into the Turkish social security system is highly recommended. If the employer does not have an establishment in Turkey, then the means of enrolling an employee into the social security system must be evaluated on a case-by-case basis for each particular employee.

Immigration aspects

Work permits/exemptions and visa requirements are other issues of essential importance that need to be considered. Above all, if the employee has Turkish nationality, then no consideration with regard to work permits or visa requirements should come into question. The International Labour Force Law numbered 6,735 (Law No 6,735) and Regulation on Implementation of International Labour Force Law (Implementing Regulation), which came into effect at the beginning of 2022, stipulate that all foreign nationals must obtain a work permit to conduct any work in Turkey.

According to the provisions of the Law No 6,735, there are different types of work permit: definite term, indefinite term and independent work permit. The most common and straightforward way to obtain a work permit relates to whether a specific employer and their employee requires to be enrolled into the social security system by that specific employer. There are some exceptional cases in which a work permit may be issued. For example, with the recent amendment made through the Implementing Regulation, it has become possible to obtain a work permit for up to two years, for an employee who is assigned as a manager in a workplace of a company established in Turkey or in jobs requiring expertise within the scope of in-company employee exchange, while working in a foreign workplace.

There are also provisions which regulate work permit exemptions for certain groups, for the periods specified under both Law No 6,735 and the Implementing Regulation. For example, work permit exemption may be granted for up to: a month for foreign nationals who work within the fields of scientific, cultural or artistic activities; three months for foreign nationals who provide cross-border services in accordance with the Law or to the board members of joint stock companies not based in Turkey.

There are also strict timeframes and detailed rules under both the Law and Implementing Regulation regarding the application process. Complying with these requirements is of vital importance since non-compliance may result in application rejection or delay in obtaining the work permit or exemption. In addition, administrative fines may apply for non-compliance with the Law. These fines may be imposed on both the foreign national employee working for an employer without a permit and on the employer or employer’s representative who employs foreign employees without a work permit or work permit exemption.