attachment 9 - Contractor Registration Process for Turkey 2020.pdf

ODC Turkey

REGISTRATION PROCESS FOR

DOD CONTRACTORS IN TURKEY

US contractors (firms or individuals) accompanying the U.S. Forces have been operating in Turkey for more than 60 years. Under the international agreements with the Government of Turkey, these contractors and their

US national employees have been given some rights and privileges, including corporation/income tax exemptions, tax and customs duty exemption to import personal and household effects, use of Post Exchange and related activities, etc. To start getting benefits from these privileges, the Turkish Government (Ministry of

Foreign Affairs (MFA)) needs to be notified in accordance with the Exchange of Diplomatic Notes (DipNote)

630. Even though there have been several changes in Turkish laws regarding foreign companies in recent years, the process for contractors accompanying US Forces in Turkey is still relatively easy due to DipNote

630 and many years of implementation. The basic procedural steps are discussed below.

This process is generally for contractors that have not previously performed DoD contracts accompanying US

Forces in Turkey. Unless there is a significant change in the type of work or location or a significant increase in the number of US national employees, diplomatic notification and tax registration is only required once per company—not for each new contract award. Contracting officers should allow not less than 90 days between the contract award date and the required work start date.

This informational document was prepared by the Office of Defense Cooperation (ODC) Turkey Legal

Office to assist contracting officers and new DoD contractors in Turkey. It is not intended as legal advice and does not create obligations on the part of the US Government.

Diplomatic Notification

For new DoD contractors in Turkey, contracting offices should provide the following information to the ODC

Turkey legal office (odct.tja@us.af.mil) as soon as possible after contract award:

• Legal name of the company

• Office address in Turkey for correspondence and registration with the tax office1

• Description of the service(s) to be provided in Turkey

• Location(s) where the services are going to be performed

• Number of projected US national employees

• Start and end dates of the contract

• Contractor representative’s contact information for Turkey (e.g. site lead)

• Contact information for the Contracting Officer’s Representative (COR) or requiring agency in Turkey

ODC Turkey will coordinate with the US Embassy to notify MFA of the new contractor via a DipNote. After completing their internal procedures, MFA will inform the relevant Turkish Ministries, such as Customs and

Commerce, Labor and Social Security, Finance, and Interior, about the new US Forces contractor. MFA will reply with a DipNote indicating that the new contractor and its US employees will be granted the rights and privileges given by the related agreements and legislation (DipNote 630, Tax Relief Agreement, etc.). In some cases in the past, however, MFA did not send a response.

MFA’s DipNote will be given to the contractor representative. If there is no MFA response during a reasonable time period, a copy of the US Embassy’s DipNote will be given to the contractor. The contractor should then get the document translated into Turkish and notarized by a Turkish notary.

1 This location may be the worksite if allowed by the agency.

Tax Registration

After getting a notarized translation of the MFA response (or the US DipNote if there was no reply from

MFA), the contractor will apply to the Turkish tax office nearest to the company’s office address and register itself as taxpayer. This complies with the provisions of the Laws on Income and Corporation Taxes and is required by Article 15 of the 1954 Tax Relief Agreement Annex. Although registered as above, contractors will not pay income or corporation taxes for their revenues related with their services to the US Forces in

Turkey. In addition, their US national employees will not be required to pay income tax in Turkey.

Residence and Work Permits

Before starting its activities in Turkey, the contractor is required to follow the necessary legal procedures and acquire work permit for its employees that are not ordinarily resident in Turkey. According to the Turkish

“Law on Work Permits of Foreigners”, foreigners are required to get work permits before they start working independently or as employed by another entity. According to Foreigners and International Protection Law

(No:6458) work permit is considered as residence permit and a seperate residence permit application is not required. Procedures to obtain a work permit is explained in detail at “http://www.calismaizni.gov.tr/” in

Turkish language. Contractors either has an employee to manage such issues or they hire a local lawyer to apply for work permits on their behalf. As soon as a problem occurs with the application, the applicant is informed by the administration through an e-mail and a suspense date is given to complete or correct the issue.

If the application is done IAW the regulations and all documents are submitted to the ministry in time, the work permit process is normally finalized within 30 days.

The contractor employees, who have been issued work permits, must apply and request visa (work visa) to enter the Turkey within 90 days from the issue date of the work permit.

If the company decides to hire local nationals and/or non-US nationals to work in Turkey, local labor requirements (e.g., informing the regional labor directorate of the worksite within a month per Art 3 of Labor

Law No. 4857; having a written labor contract with the employees per Art 8 of the same law; and notifying

Social Security Corporation about the employees before they start working per Art 8 of Social Insurance and

General Health Insurance Law No. 5510) have to be followed to prevent violation of related Turkish legislation.

Social Security

For several reasons, US national employees of DoD contractors supporting US Forces do not pay into the

Turkish social security system. DoD contractors should not register their US national employees in the

Turkish social security system without coordinating with the contracting officer or legal office. If a contractor is notified it must register their US national employees in the Turkish social security system, it should inform the contracting officer and ODC Turkey.

Branch or Liaison Office

Establishing a new company, branch or liaison office in Turkey for the US forces contractors is generally not required and may have significant consequences beyond the scope of this document. Most DoD contractors have managed to provide their services to the U.S. Forces without establishing a new company, branch or liaison offices in Turkey. Companies starting a commercial activity in Turkey besides its service contract with

US Forces may be required to register a branch office or liaison office in accordance with the Turkish commercial legislation. The ODC Turkey legal office should be notified if the company will engage in any other commercial activities in Turkey.

Serdar ORBAY /Legal Adviser ODC-T http://www.calismaizni.gov.tr/ http://www.calismaizni.gov.tr/