Employee Information Guide

Pursuant to the Law No. 4632, employers shall automatically include in the AES the employees who are Turkish citizens or Blue Card holders and who have not turned 45. If you are over the age of 45, you can make a request and join the system. Accordingly, employers shall send to the system at least three percent of the premium-based earnings and of the pension deduction-based salary for the private sector and the public sector, respectively. Employees shall have the right to stay in the AES for as long as they wish.

Employees who have just started to work in a workplace where the employees have already been included in pension system, are included in the pension plan when the contribution paid by the employer is deducted from the first wage payment and transferred to the pension company.

If you live in a country that does not have a social security treaty with Turkey (if you fall within the scope of article 5g of the Law No. 5510, for instance; if you are a Turkish employee who is taken by an employer to be put to work in a foreign country that does not have a social security treaty with Turkey) you shall not be entered in the AES.

Change of Employer

When you change your job, different rules shall apply depending on whether your new employer is in the AES system or whether you were entered before, and on what age you are.

If your new employer is in the AES;

• If you have exercised your right of withdrawal after being entered in the system at your previous workplace or left employment and you were 45 or younger when you started your new job, you shall be entered in the system again.
• If you have not exercised your right to withdraw from or leave the system you were entered in at your previous workplace, you shall transfer your current accumulations, along with your vested retirement period and state contribution account rights, to the new employer's plan.

If your new employer is not in the AES;

• If you have not exercised your right to withdraw from or leave the system you were entered in at your previous workplace, you may continue to pay contributions yourself to your old plan or terminate it. In the event of continuation, you shall be transferred to the pension plan that your new employer will provide upon entry into the AES.
• If you were not entered into the system at your previous workplace, the AES may be a good choice for you.

Employees with Multiple Employers

If have multiple employers and they report salary information to the SSI, you shall be entered separately to the plans offered by each employer in the AES.

Employees with Multiple Premium-based Earnings while Working for a Single Employer

If you work at multiple workplaces of a single employer, in other words; if multiple salary reporting is done to the SSI for you by the same employer, you shall be entered into the relevant pension plan for each workplace within the scope of the AES.

Employees that Leave Employment after just a short period of time

If you leave employment after working even for one day at a workplace, premium-based earnings will occur. Thus, you shall be entered into the system.

Employees with a Current Voluntary IPS Contract

There is no relation with your voluntary IPS contract and the contract as part of the AES. In other words, if you have both AES and IPS contracts at the same time, a separate account shall be opened for each, and no transfers can be made between these accounts.

Only the employer can change the pension company or transfer contracts to another pension company in the AES. Therefore, unless you begin working for another employer that is included in the automatic participation, you cannot change your pension company or transfer your accumulations to another pension company. You are not be allowed to change the pension plan, except for a plan change to request a plan with or without interest.

Nevertheless, it shall be up to you to decide on the funds for your contributions to be invested in. The AES offers fund options with or without interest, and you make your choice at the time of entry into the system. If you do not use your right to select, the employer shall decide on the funds to invest your contributions.

The funds offered vary depending on the period that your certificate has remained in the system.

You are allowed a maximum of twelve fund distribution changes per year. For each fund distribution change request, you can select a maximum of 20 funds, including funds offered through BEFAS.

• Only a fund management fee deduction may be applied to your accumulations as per automatic participation.

No other deduction shall be made on your accumulations.

• You may change the contribution amount.

The minimum contribution set by the Legislation is three percent. If you wish, you may increase the contribution by notifying your employer or reduce the increased amount again, provided that the minimum contribution amount stated in the Law No. 4632 is not below three percent.

You cannot make addition contributions other than the periodically paid contribution.

• You may change the fund distribution.

You may change the fund distribution a maximum of twelve times per year after completion of the withdrawal period. You may exercise this right one year after entering the plan.

• You may suspend contribution payments.

You may request suspension of your contribution payments. However, contribution collection shall re-start at the end of three months. You may extend the suspension period by notifying your employer or pension company. Extension of suspension may only be made for quarterly periods.

• You may continue the payment when you change your workplace or leave employment.

Once your workplace changes, your new employer is required to enter you in the AES, if it is included in the AES. In that case, if you have a current AES contract with your previous employer, you may transfer your accumulations from it to your new contract.

If your new workplace is not yet in the AES, you may make payments to your current contract individually. In this case, you must submit your request to the pension company with regard to continuing your payments, by the end of the following month after the workplace change. You can continue to pay a contribution to the relevant certificate in the amount you set yourself.

• You may remain in the system for as long as you wish.

You shall be informed about your inclusion in the AES on the business day after your first contribution is sent to your pension company account in cash. You may request to withdraw within two months after this notice. You may also leave the system anytime after this two-month period.

• After you have left the system, you may re-enter under certain conditions.

If you leave the system by exercising your right to withdraw or leave the system voluntarily, you can re-join the system if you are working at the same workplace as of the date of request by sending your employer your request to be included in the system again.

Once you terminate all your certificates and leave the AES, you will not be given the 1,000 Turkish lira additional state contribution. However, if you have used your right of withdrawal and no additional state contribution has been calculated in relation to your certificates before, you can benefit from the 1,000 Turkish lira additional state contribution when you re-join the system. You will also lose the vesting periods for retirement and contribution arising from the contract you terminate.

You can buy and sell funds from other pension companies through the Individual Pension Fund Trading Platform (BEFAS).

As of July 1, 2021, participants are able to trade the funds of other pension companies that are available on the BEFAS platform. If you want to buy or sell the funds of other companies through BEFAS, you can make your request via the internet and/or the mobile application of your pension company.

You can easily access all your contracts with pension companies in the Individual Pension System (IPS) via the BES Mobile application.

With the BES Mobile application, you can easily access many information such as total savings in the system, State contribution amount, State contribution entitlement rate, historical development of your savings, retirement date, personalized estimated retirement income and savings amount, distribution of your savings according to fund types, risk value of your fund portfolio, your child's individual pension accounts, the accounts of your relatives to whom you inherit.

You can easily log in to the application with your e-State user profile without having to define a new username and a password. You can download the BES Mobile application to your mobile devices free of charge via Google Play and App Store.

Click to download the application to your iOS device.
Click to download the application to your Android device.

You have the right to decide on the funds for your contributions to be invested in within the scope of the certificate issued in your name. The system offers interest and no-interest fund choices. If you are conscious about interest, you can invest in no-interest participation funds with the phrase participation in the title of the pension company with which your employer has signed a contract.

Participation funds complying with Islamic principles include various instruments such as gold and other precious metals, stocks complying with the participation index and participation banking principles, and no-interest securities investment funds.

You can also buy and sell participation funds offered by pension companies other than the pension company with which you have a contract, via the Individual Pension Fund Trading Platform (BEFAS).

Your employer deducts at least three percent from your salary and transfers it into the account opened in your name in the pension company. You can track the contribution payments you have paid and other account information on your pension company's website. You will also find contribution information on the "Employee Information Note" sent to you quarterly by your pension company.

You can view the contributions you have paid on the payslip provided by your employer.

If you employer does not transfer your contribution to the pension company on time or does so late or incomplete, the unpaid contribution and the returns you may have lost shall be collected from your employer and transferred to your pension account.

As part of the AES, you shall receive;

• State contribution at a rate of 30 percent of the paid contributions
• An additional 1,000-Turkish lira state contribution, if you remain in the system at the end of the two-month withdrawal period
• An additional state contribution that equals 5 percent of your accumulations, in case of opting to receive the right of pension as a 10-year annuity

State contribution shall be calculated as a commitment, and the committed amounts shall be recorded in your state contribution account. You shall be entitled to the amounts in your state contribution account in the following ratios:

• 15 percent by staying in the system for at least 3 years,
• 35 percent, by staying in the system for at least 6 years,
• 60 percent by staying in the system for at least 10 years,
• 100 percent in the event of retirement, death or disability

The 30-percent state contribution amount that is recorded as commitment shall gain value based on the CIP fluctuations at the beginning of the calendar year following the month when the state contribution payment is calculated. According to the vesting period, the amount you are entitled to shall be paid into your account in cash.

However, there is an upper limit to the state contribution that will be calculated for the contributions. The state contribution amount you can receive within a calendar year shall not exceed the total annual gross minimum wage that is calculated based on the gross minimum wage determined for the first and second half of the relevant year. Contribution payments paid after January 22, 2022 and exceeding the aforementioned limit will be considered in the calculation of the State contribution as carryover contribution shares transferred to the company accounts on the first day of each year. The limit shall be calculated per each participant. The 1,000-Turkish lira state contribution shall not be included in the annual state contribution limit.

Separate state contribution limits have been set for the contracts within the scope of AES and IPS, respectively. In other words, based on the state contribution upper limits of the year 2024 an individual that is in both the voluntary IPS and automatic participation system can benefit from the maximum annual state contribution amount by paying a contribution of 240,030 TL for both contracts separately.

Pursuant to the Law No. 4632, employers that fall within the scope shall enter into the AES the employees who are Turkish citizens and blue card owner. Accordingly, your employer has certain responsibilities toward you.

• Selection of the pension company: Your employer shall be obligated to draw up a contract with the pension company of its choice to ensure your inclusion in the AES.
• Selection of funds: When you enter the AES, your employer shall ask your fund preferences with or without interest, and if you do not make a choice, it shall select one for you.
• Payment of contribution: Your employer shall be obligated to deduct the contribution from your salary and transfer to your pension company accurately.

In order to retire from the AES, you must stay in the system for 10 years from the first date of entry into the system and have attained the age of 56. After meeting these conditions, you may stay in the system and continue paying contributions to grow your savings even more.

Once you earn and use the right to retirement,

• You shall be entitled to request a lump-sum payment of some of your accumulations from the individual pension and state contribution accounts.
• You can also choose to stay in the AES and receive your accumulations in part from the pension company according to the reimbursement plan you decide.
• You may earn regular income by purchasing an annuity with some or all of your accumulations.

While you are exercising your right for retirement; if you purchase an annuity for at least 10 years, you shall earn the right for a state contribution that equals five percent of your accumulation amount.

If you leave the AES, the pension company shall deduct income (withholding) tax on the payments due to you based on your accumulations. The withholding tax deduction rate is as follows:

• Only 5 percent for vested participants in the system and for participants who leave the system due to reasons such as death, disability or liquidation,
• 10 percent for participants who leave the system before becoming vested for pension despite having stayed in the system for 10 years,
• 15 percent for participants who leave the system after having stayed for fewer than 10 years.

With the article 26/C of the Regulation of the Private Pension System, went into effect on September 28, 2023, it has become possible to pledge IPS savings as collateral through the transfer of receivables in the use of bank loans. Participants will be able to benefit from this opportunity after the infrastructure works are completed by pension companies and banks.
All processes regarding the transfer of receivables will be carried out through the platform provided by the Pension Monitoring Center.

With this amendment, you can transfer to banks all or a part of your receivables, excluding the state contribution from your individual pension contracts, through a receivable transfer contract. However, contracts subject to administrative and legal claims regarding fund shares, such as cautionary judgment, seizure, bankruptcy and pledge, and noncontributory group contracts, contracts whose transfer or termination processes are ongoing, contracts established by transfer but not more than 6 months after the transfer, and contracts within the scope of pension income plan cannot be transferred. The transferred amount continues to be invested in the funds determined by the Board.

By the decision of the Insurance and Private Pension Regulation and Supervision Board, the transferred amount will continue to be invested in the Transfer of Receivables Fund of Anadolu Hayat ve Emeklilik A.Ş for participants who are not interest sensitive. For participants who are conscious about interest, it will be invested the Participation Based Transfer of Receivables Fund of Türkiye Hayat ve Emeklilik A.Ş.

After your loan debt is paid off, your receivable transfer contract ends, and your savings are re-invested in your preferred funds as part of your individual pension contract. If you default on at least two consecutive installments of your loan debt and do not make payment at the end of the at least 30-day period given by your bank to pay the unpaid installments, your debt will become due. If your loan debt is not paid and becomes due, the bank may request to collect the debt from the transferred receivable 30 days after the due date. In this case, your IPS contract is terminated and the remaining amount from your savings is paid to you after your debt to the bank is paid off.

In the event that a transfer contract is drawn up:

• You cannot transfer your savings to another bank before your transfer contract expires.
• You cannot terminate your individual pension contract while the transfer contract is in effect.
• You cannot transfer the savings in your individual pension account to other companies.
• You cannot make transactions regarding the funds in which the transferred amounts are invested.

In the event of the employee’s death, the beneficiary(ies) stated in the contract, or if the contract does not specify any beneficiaries, the legal heirs, may legally request from the pension company to receive the savings in the individual pension account, including all state contributions. If you do not know whether the people to whom you are a legal heir has a pension contract, or if there is a contract (AES savings) but you do not know with which company, you may find out through the "Individual Pension Contracts Inquiry (On Behalf of the Person You Are Heir to)" service offered through the BES Mobile application or e-Government. You can inquire which pension companies the person you inherit from has a contract with by verifying your inheritance relationship by the institution from which you received the certificate of inheritance and entering the TR Identity Number of the person you inherit from. Inquiries can be made for certificates of Inheritance received from the Court - Ministry of Justice after 16/12/2016, and from the Notary - Notaries Union of Türkiye after 02/06/2021. You can get information by submitting your certificate of inheritance obtained before these dates to the PMC via the "Contact Us" page on the PMC Corporate Website.

Pension companies request the following to process the claims of the beneficiaries or legal heirs of the deceased:

• TurkStat Certificate of Death (depending on the place of death, taken from the health institution, municipal doctor, community health center, gendarmerie station commanders or village headmen),
• Certificate of inheritance (received from notary public or the relevant court),
• Form or petition prepared for the notification of death,
• A copy of the identity of the heirs mentioned in the certificate of inheritance and the Turkish lira checking account details (e.g., IBAN) registered in their name,
• Inheritance and gift tax no lien affidavit

You can contact your pension company to get the full list of documents they request.

Within 20 business days of the request for payment of the savings by the beneficiary(ies) or legal heirs, the company pays the remaining amount to the beneficiary(ies) or legal heir(s), after deducting a 5-percent income tax on the employee’s savings.

However, according to the provisions of the “Law on Restructuring of Certain Receivables and Amendment of Certain Laws” dated March 12, 2023, the heirs of the employees who died due to the earthquake on February 6, 2023, in the zones that are part of the force majeure declared by the Ministry of Treasury and Finance are exempt from income tax.

If the savings of the deceased employees are paid to their beneficiaries or legal heirs, the payment will be subject to inheritance and gift tax. You can find more on this tax in the “14. Payment of Savings to Beneficiaries or Legal Heirs in Event of Death of the Employee?” section of this Guide.

In case of the employee’s death, the savings and, if any, the money in the state contribution account is paid to the beneficiaries and legal heirs stated in the pension contract, without prejudice to the provisions of Turkish Civil Code No. 4721, dated November 22, 2001.

What is Subject to Tax?

During the term of the pension contract or upon the death of the employee who is entitled to retirement, his/her savings and state contributions, if any, are subject to the inheritance and gift tax. Accordingly, an income tax of 5 percent will be withheld on the income earned by the deceased employee, and the remaining portion will be subject to inheritance and gift tax. After the deduction of the tax exemptions, the portion that is passed on to the heirs or beneficiaries at the relevant inheritance shares will be taxed according to the rates determined in the tariff.

What is a Taxable Event?

It refers to the gratuitous acquisition of the value determined by the individual pension and automatic participation system by the beneficiaries or legal heirs through inheritance (succession) or other means during the term of the pension contract or upon the death of the employee who is entitled to retirement.

According to individual pension contracts, after the natural or accidental death of the insured, the insurance company must do the following:

• The amount of savings paid to the heirs must be included in the estate through inheritance;
• If the insured designated a non-heir third party as the beneficiary, the savings amount to be paid to the beneficiary must be considered as a gratuitous acquisition;

After being taxed as an earning on movable assets pursuant to Article 75 of the Income Tax Law, the amount must be subjected to the inheritance and gift tax.

Who is the Taxpayer?

During the term of the pension contract or upon the death of the employee who is entitled to retirement, the legal heirs acquiring by inheritance or, in case the employee has appointed a third person who is not an heir as the beneficiary, the beneficiaries acquiring property gratuitously.

Additionally, the employee may choose to register his/her legal heirs as beneficiaries of the individual pension contract. In the event of a donation of goods to a person from his/her mother, father, spouse and children (except for donations from the adopted to adopting parents), the tax is calculated by applying half of the rates in the tariff regarding donations.

What is the Tax Base?

During the term of the pension contract or upon the death of the employee who is entitled to retirement, the taxpayers who have made out their inheritance and gift tax declarations due to the savings inherited or donated to them will determine the basis of the inheritance and gift tax for the first assessment in accordance with the values in the Tax Procedure Law of the gifted wealth. The tax base is obtained by subtracting the exemption amount determined by hereditary transmission or donation from the total of the assets acquired.

Accordingly, upon the death of the person participating in the individual pension system, the tax base to be calculated for his/her savings (contribution, contribution margin, state contribution and state contribution margin) will be the current value of the assets subject to donation, which is the basis of the tax assessment on the day of the taxable event.

The various debts and expenses that can be deducted in determining the inheritance and gift tax base are as follows:

• Debts and tax debts of the testator based on valid documents in the case of hereditary transmission;
• Debts incurred in relation to the property and tax debts in gratuitous acquisitions (if the donator undertook the debts related to the donated goods, these debts are not deducted);
• Debts transferred from the goods belonging to persons who are citizens of the Republic of Türkiye to those in foreign countries, and inheritance and gift taxes paid due to these goods in foreign countries (the aforementioned debts and taxes cannot exceed the value of the declared goods);
• Obituary expenses paid to the newspaper by the heirs for the funeral, burial and obituary.

For these debts and expenses to be deducted in the determination of the tax base, it is obligatory for the taxpayers to show them in the relevant section of the declaration and attach the relevant documents to the declaration.

What is the Tax Rate?

The tax tariff is arranged based on double tariff for inheritance and donations, with a double incremental rate. There are increasing rates for donations in one part of the tariff and increasing rates for inheritances in the other. On the other hand, the increasing proportionality regarding the bases exceeding the amount in the last bracket is turned into a fixed rate.

The tax base brackets of the tax tariff are applied with annual increases at the revaluation rate determined in accordance with the Tax Procedure Law based on the previous year. Fractions that do not exceed 5 percent of the brackets calculated in this manner are not taken into account. The President is authorized to increase or decrease these determined amounts by half.

However, according to the provisions of the “Law on Restructuring of Certain Receivables and Amendment of Certain Laws” dated March 12, 2023, the individual pension savings hereditarily transmitted to the heirs of the employee who died due to the earthquake on February 6, 2023 are exempt from inheritance and gift tax.

Where is the Declaration to be Submitted?

For the legal heirs of the employee or his/her appointed beneficiaries, after receiving the inheritance tax declaration and the certificate of inheritance during the term of the pension contract or upon the death of the employee who is entitled to retirement;

• Declarations can be submitted from the interactive tax office website by logging in with the information of any of the heirs.
• In hereditary transmissions, the declaration is submitted to the tax office where the domicile of the deceased is, while in donations, the declaration is submitted to the domicile of the person who accumulated the savings.
• In case the savings were accumulated by legal entities or other entities, the declaration is submitted to the tax office where the headquarters of the said legal entities or other entities are located.
• If the residence of the legator or the person who accumulated the savings is in a foreign country, the declaration is submitted to the tax office in the location of his/her last official residence in Turkey.
• Taxpayers in foreign countries submit their declarations to Turkish consulates.

• If the testator or the person who accumulated the savings has never resided in Turkey or the last residence cannot be determined, the inheritance and gift tax returns must be submitted to the tax office in the location of the property hereditarily transmitted or otherwise donated or in the location where the taxpayers reside (all assets transferred from the testator must be declared in this declaration).

Declarations can be made to the relevant tax offices in person or sent via registered mail.

When is the Declaration Submitted?

Hereditary Transmissions in General

During the term of the pension contract or upon the death of the employee who is entitled to retirement, the legal heirs of the employee will submit their declarations on the following dates:

• If the employee’s death occurred in Türkiye and the liable parties are also in Türkiye, the declaration is submitted within four months following the date of the employee’s death;
• If the employee’s death occurred in Türkiye and the taxpayers are in a foreign country, the declaration is submitted within six months following the date of the employee’s death;
• If the employee’s death occurred in a foreign country and the taxpayers are in Türkiye, the declaration is submitted within six months following the date of the employee’s death;
• If the employee’s death occurred in a foreign country and the taxpayers are in the same foreign country, the declaration is submitted within four months following the date of the employee’s death;
• If the employee’s death occurred in a foreign country and the taxpayers are in a different foreign country, the declaration is submitted within eight months following the date of the employee’s death;
• In case of absence, the declaration is submitted within one month following the date of registration of the decision of absence in the death registry.

Non-Hereditary Donations

During the term of the pension contract or upon the death of the employee who is entitled to retirement, the beneficiaries appointed by the employee submit their declarations within one month following the legal acquisition of the savings, and if any, the amounts in the state contribution account.

Which Documents Are to be Attached to the Declaration?

• TurkStat Certificate of Death (depending on the place of death, taken from the health institution, municipal doctor, community health center, gendarmerie station commanders or village headmen),
• Certificate of inheritance (received from notary public or the relevant court),
• Form or petition prepared for the notification of death,
• A copy of the identity of the heirs mentioned in the certificate of inheritance and the Turkish lira checking account details (e.g., IBAN) registered in their name,
• Inheritance and gift tax no lien affidavit.

How is the Tax Assessment Performed?

During the term of the pension contract or upon the death of the employee who is entitled to retirement, there is a two-stage assessment in the inheritance and gift tax to be paid by the legal heirs and/or the beneficiaries appointed by the employee. These are as follows:

• Tax is levied on the tax return submitted by the taxpayers within 15 days by the tax office. This assessment, which is made on the declaration of the legal heirs and/or the beneficiaries appointed by the employee, is temporary as it is an “initial assessment.”
• Valuation errors made by the legal heirs and/or the beneficiaries appointed by the employee in the declaration are corrected by the tax office by applying the correct valuation criteria in the “final assessment.”

How is the Tax Paid?

Inheritance and gift tax is paid in three years from the date of accrual and in two equal installments in May and November each year, totaling six installments.

• The tax can be paid from ivd.gib.gov.tr or via the GİB mobile app, either by logging in or without logging in to the Interactive Tax Office by choosing the “Payment by Document Number” option under the Quick Payment options:

1. I. With the credit cards in the contracted banks;
2. II. From the debit cards or bank accounts in the contracted banks;
3. III. Banks operating in foreign countries: with credit cards, debit cards and other payment methods;

• Contracted banks;

1. I. Branches;
2. II. Alternative payment channels (Internet Banking, Telephone Banking, Mobile Banking, etc.);

• PTT branches;
• All tax offices.

Which Amounts Are Exempt?

The taxpayers can deduct the documented debts of the deceased employee, the expenses incurred for the funeral equipment and curation, tax debts, as well as the amounts donated to the beneficiary and the amounts and tax debts related to these amounts from the tax base of the amounts they are entitled to.

• For beneficiaries, 23,387 Turkish lira of donations will be exempt from tax in 2023.
• For legal heirs, 1,015,747 Turkish lira of the inheritance shares belonging to each of the descendants and spouses, including the adopted, from the properties with values determined according to Article 10 of the General Communiqué on Inheritance and Gift Tax Law will be exempt in 2023. In the absence of any descendants, 2,032,742 Turkish lira of the inheritance share belonging to the spouse will be exempt from tax in 2023.

What is the Inheritance and Gift Tax Situation for Those Receiving State Contributions?

According to subparagraph (o) of Article 4 of the General Communiqué on Inheritance and Gift Tax Law titled “Exemptions,” the vested portion of the state contributions made to the individual pension account under the Individual Pension Savings and Investment System Law No. 4632 dated March 28, 2001, are exempted from the inheritance and gift tax. It’s important to note that this regulation concerns the employees. If the part of the state contributions that the beneficiaries or legal heirs are entitled to is paid to them and they exceed the exemption limit, they will have to pay inheritance and gift tax.

A 5-percent deduction is made from the savings and state contributions of the employees who leave the system due to the amount of income included in the payments made to those who leave due to compulsory reasons such as death. In this case, since the duration of the employee’s stay in the system is not taken into account, the legal heirs and/or beneficiaries can be entitled to all of the state contributions of the deceased employees.

In the event of death, if you do not know whether the people to whom you are a legal heir have pension contracts or whether such contracts exist, but you do not know with which company, you may send your request to the PMC via the Contact Us page with a copy of your certificate of inheritance.

CASE – 1

Contribution Amounts: 40,956.49 TRY

• Contribution: 35,195.80 TRY
• State Contribution: 5,760.69 TRY

Fund Returns: 10,296.72 TRY

• Contribution Return: 8,746.37 TRY
• State Contribution Return: 1,550.35 TRY

Total Savings: 51,253.21 TRY

1. If the employee has passed away and the spouse is the sole heir:

(Note: It is assumed that the participation receivables are determined with the division of matrimonial property, which is the priority legal transaction.) 35,195.80 TRY + 5,760.69 TRY = 40,956.49 TRY, no tax calculated on this amount. 8,746.37 TRY + 1,550.35 TRY = 10,296.72 TRY x 5% = 514.83 TRY (income tax amount) 10,296.72 TRY - 514.83 TRY = 9,781.89 TRY will be the net return. Amount Exempt From Inheritance and Gift Tax: 2,032,742 Turkish lira for the inheritance share of the spouse in case there are no inheriting descendants for the year 2023. Inheritance and Gift Tax Base: 0 TRY Inheritance and Gift Tax Payable: 0 TRY Amount left to the inheriting spouse: 40,956.49 TRY + 9,781.89 TRY =50,738.38 TRY.

2. If the employee has passed away and assigned another person as beneficiary with an inheritance contract:

35,195.80 TRY +5,760.69 TRY = 40,956.49 TRY, no tax calculated on this amount. 8,746.37 TRY + 1,550.35 TRY = 10,296.72 TRY x 5% = 514.83 TRY (income tax amount) 10,296.72 TRY - 514.83 TRY = 9,781.89 TRY net return. 40,956.49 TRY + 9,781.89 TRY = 50,738.38 TRY Amount left to the person assigned as beneficiary with an inheritance contract; 50,738.38 TRY - 23,387 TRY = 27,351.38 TRY IGT (inheritance and gift tax) base 27,351.38 TRY x 10% = 2,735.138 TRY Amount left to the beneficiary: 50,738.33 TRY - 2,735.138 TRY = 48,003.242 TRY.

CASE – 2

The employee passed away on January 2, 2023. The heirs did not disclaim the inheritance within three months. The amount of savings of the employee: 2,500,000 Turkish lira. (Note: Firstly, it was ensured that the assets belonging to the deceased employee and the living spouse were determined, and that the goods that were determined to belong to the living spouse as a result of this division were not declared in the inheritance and gift tax return; income tax was withheld, and the reserved share of the spouse was preserved.)