Due to the recent economic difficulties in our country, many companies have fallen into financial distress and, as a result, have begun to face difficulties in fulfilling their debt obligations. This situation, of course, also affects the companies that are creditors of these firms and, consequently, indirectly impacts their financial strength in a negative way.
For these reasons, debt restructuring agreements or promissory notes are frequently signed in practice, and as a result, the terms of the companies’ debts—such as repayment schedules and collateral—are often modified or renewed. However, debt restructuring or installment plans carried out without a thorough understanding of the details frequently lead to even greater losses for the companies.
A debt restructuring process involves certain institutions occasionally restructuring a debt to provide payment relief to the debtor. The debtor may apply to the relevant authorities with the required documents to restructure the debt in a manner suitable for their budget and pay it accordingly.
The restructuring of tax debt, as addressed in Article 48 of Law No. 6183 on the Procedures for the Collection of Public Receivables, regarding deferment and installment plans; which, in addition to safeguarding public receivables, introduces provisions that protect and support the taxpayer—provided the taxpayer demonstrates good faith—by requiring a written request, the provision of collateral, and, most importantly, the taxpayer’s “being in a very difficult situation,” thereby enabling the continued accrual and collection of public receivables.
How does the tax debt restructuring process work?
To initiate the debt restructuring process, a debt inquiry must first be conducted. Individuals who verify the existence of a tax debt and obtain the debt details should apply for restructuring. Applications made within the specified period during the restructuring phase can be submitted in person at the tax office via a written petition or by mail. For online applications, all required identification information—including the Turkish ID number—must be entered first.
Who can apply for debt restructuring?
Individuals listed as debtors in tax office records,
Taxpayers (including those who issued fake invoices)
Those subject to penalties
Individuals deemed public debtors due to liability regulations
Certified public accountants jointly and severally liable for the payment of the debt along with the taxpayer,
May benefit from this program based on the amount for which they are liable.
For which tax debts can deferment and installment plans be requested?
Value-Added Tax,
Provisional Tax,
Excise Tax,
Bank and Insurance Transactions Tax,
Special Communication Tax,
Fees (excluding land registry fees based on supplementary assessments),
Funds,
Contributions (including the Education Contribution and related late payment surcharges),
Fees
What is the deferral interest rate and the maximum installment period?
The deferral interest rate is 12% per annum. The maximum installment period is 36 months as required by law.
For all these reasons, we recommend that you seek professional assistance, as it is essential to take these matters into account when restructuring existing debts through the modification of payment terms or the provision of collateral, and to include provisions to this effect in the relevant contracts and protocols.