Presidential Decree No. 1266 (“Decree”) has been published on the Official Gazette dated June 29, 2019 and numbered 30816. According to the Decree in question, the ratio of delay fine that is stated in the first subclause of Article 51 of the Law No. 6183 on the Collection Procedure of Public Receivables (“Law”) dated July 21, 1953.
The ratio of the delay fine of 2% that has been set by the Presidential Decree no. 62, which was published on the Official Gazette dated September 5, 2018 and numbered 30526 is amended into 2.5% by the said Decree.
WHAT IS “DELAY FINE”?
The notion of “public receivables” is defined by the first Article of the Law no. 6183. According to the subject article, the term “public receivables” refers to;
“taxes, duties, charges, court fees for criminal investigations and procedures, tax penalties and monetary penalties (…); delay fines and interest due to the government, the private offices of the provinces and to municipalities and to other receivables due to the same bodies from implementation of public services by the same bodies other than those due under contract, tort or misappropriation and to the follow up costs of the same.”
As a principle, the taxes due to public receivables must be paid at maturity. In breach of this rule that is the case in which the discharge of the tax debt is delayed, a delay fine is imposed on the debtor in default according to the Law. The aim of this regulation is to assure the equality of the debtor in default and the debtor who performed their obligation when due. The obligation of delay fine payment is regulated in Article 51 and 52 of the Law.
The Law distinguishes the terms “delay fine” and “default interest”. Default interest is an obligation related to the realization period of the debt whereas delay fine refers to an obligation related to collection. In the term delay fine, there is a tax debt in question that is specified, but not performed at yet.
AMENDMENTS BROUGHT BY THE DECREE
According to the Article 51 that is amended by the Decree, a delay fine in the ratio of 2.5% for each month of delay shall be applied from the due date for the unpaid part of the public receivable. Delay fines for incomplete months will be calculated on a daily basis.
This Presidential Decree enters into force on July 1, 2019 and is enforced by the Minister of Treasury and Finance.
The full text of the Decree published in the Official Gazette No. 30816 dated June 29, 2019 can be accessed here.
You can contact us for further information and to take advantage of our advocacy and consulting services. You can find detailed information about our office’s work on Administrative and Tax Law on our website.
Summer Intern – Bilkent University Faculty of Law
Uçar Law & Consultancy Office