Changes in Late Fees and Deferment Interest Rates Announced in Turkey

deferment interest turkey

Significant updates have been made to the deferment interest rates and late fee rates as stipulated under Law No. 6183 on the Collection Procedure of Public Receivables in Turkey.

These changes were officially published in the Official Gazette on May 21, 2024, issue number 32552.

Deferment Interest Rate Adjustment in Turkey

The deferment interest rate in Turkey, which is referenced in Article 48 of Law No. 6183, has undergone a notable change. Previously set at 36% annually, this rate has now been increased to 48% per annum. This adjustment was formalized through the General Communiqué on Collection (Series: C Order No: 8) issued by the Ministry of Treasury and Finance (Revenue Administration), as published in the Official Gazette on May 21, 2024.

The decision to increase the deferment interest rate reflects the government’s strategy to address the fiscal environment and ensure the efficient collection of public receivables. This adjustment is aimed at aligning the deferment interest rate with current economic conditions and fiscal policies.

Updates to Late Fee Rates

In conjunction with the change in deferment interest rates, the Presidential Decree No. 8484, also published in the Official Gazette on May 21, 2024, introduced a modification to the late fee rates as outlined in the first paragraph of Article 51 of Law No. 6183. This law, originally enacted on July 31, 1953, governs the collection procedures for public receivables.

The Presidential Decree stipulates that the late fee rate is now set at 4.5% per month. This represents an increase from the previous rate, which was set at 3.5% per month for late payments under various restructuring laws, including those numbered 6736, 7020, 7143, 7256, 7326, and 7440.

The increase in the late fee rate is designed to encourage timely payments and reduce the instances of delinquency in public receivables. By raising the financial penalty for late payments, the government aims to improve cash flow and ensure that public funds are collected more efficiently.

Implications for Taxpayers

Taxpayers and entities that are subject to the provisions of Law No. 6183 should take note of these changes and adjust their financial planning accordingly. The increase in the deferment interest rate to 48% annually means that deferring payments will now incur a higher cost. Similarly, the monthly late fee rate of 4.5% will result in higher penalties for overdue payments.

These changes necessitate careful financial management and timely compliance with payment obligations to avoid additional costs. Taxpayers are advised to review their payment schedules and consider the financial implications of these updated rates.

Access to Official Documents

For those seeking further details, the relevant communiqué and the Presidential Decree can be accessed in Turkish through the provided link (in Turkish). These documents offer comprehensive information on the adjustments and their application.

In summary, the government has made significant changes to both deferment interest rates and late fee rates under Law No. 6183. These changes, effective from May 21, 2024, aim to enhance the efficiency of public receivable collections and align financial penalties with current economic conditions. Taxpayers are encouraged to review these updates and plan accordingly to ensure compliance and minimize additional costs.