31.05.2023/64
By the Presidential Decree dated May 24, 2023 and numbered 7297; “Regulation on Small and Medium-Sized Enterprises” was published to be implemented as of May 25, 2023. The “Regulation on the Definition, Qualifications and Classification of Small and Medium-Sized Enterprises”, which was put into force by the Council of Ministers Decree dated 19/10/2005 and numbered 2005/9617, has been repealed.
The procedures and principles regarding the definition, qualifications, classification and implementation of small and medium-sized enterprises are explained in sections below.
1) Classification of Small and Medium-Sized Enterprises (SMEs):
SMEs are defined as enterprises with fewer than two hundred and fifty employees and an annual net sales revenue or financial balance sheet not exceeding five hundred million Turkish Liras.
SMEs are classified according to their net sales revenues, financial balance sheet amounts and number of employees
| Class | Annual Number of Employees | Annual Net Sales Revenue or Any of the Financial Statements |
| Micro Enterprise | Fewer than 10 People | Not exceeding 10 Million TL |
| Small Enterprise | Fewer than 50 People | Not exceeding 100 Million TL |
| Medium-Sized Enterprise | Fewer than 250 People | Not exceeding 500 Million TL |
2) Acquisition, Loss and Determination of SME Qualification
Enterprises that exceed any of the criteria taken into account when determining the SME qualification with the data of the last two accounting periods lose their SME qualification. Enterprises that fall below the said criteria with the data of the last accounting period gain SME qualification.
Business classes are determined by the data of the last accounting period. The date of the data to be used in determining the nature and class of SME is taken as the end of the month in which the Corporate Tax Return submission period is included for corporate taxpayers and the end of the month in which the Income Tax Return submission period is included for income taxpayers.
3) Business Types
Businesses are divided into three as independent business, joint business and affiliated business. If two or more enterprises have mutual capital, the larger capital ratio is taken into account when determining the type of each.
Business types are defined below in general terms:
| Type of Enterprise | Characteristics |
| Independent Enterprise | -If an enterprise alone does not own 25% or more of the capital of another enterprise, -If any or several linked enterprises do not jointly own 25% or more of the capital of this enterprise. -Sole proprietorships are independent enterprises. -When determining the class and SME status of an independent enterprise, only the data of that enterprise is considered. |
| Partner Enterprise | -If it alone or together with its linked enterprises jointly owns 25% or more and 50% or less of the capital of another enterprise -If 25% or more and 50% or less of its own capital is jointly owned by another enterprise alone or together with its linked enterprises |
| Linked Enterprise | -If it alone or together with its linked enterprises jointly owns the majority of the capital of another enterprise -If the majority of its own capital is jointly owned by another enterprise alone or together with its linked enterprises |
4) Determination of Number of Employees and Financial Data:
The total number of employees in an enterprise is determined by the total number of annual business units in that enterprise.
Annual Work Unit refers to the number obtained by dividing the total number of premium days of those employed in the enterprise with a service contract within a calendar year by three hundred and sixty.
Only those who are employed in the relevant enterprise with a service contract are considered employees. Apprentices and internship students are not included in the number of employees.
The number of employees and financial status of enterprises are based on the latest data calculated annually.
Only the number of employees is taken into account in enterprises that do not keep books on the balance sheet basis.
5) Publicly Controlled Enterprises:
In the event that 25% or more of the capital of an enterprise is jointly or individually controlled by one or more public institutions or organizations other than those listed in the third paragraph of Article 8 of the regulation and institutions and organizations that have this qualification, these enterprises are not considered SMEs.
6) Business Declaration
“Business Declaration” in Annex-1 to the Regulation are filled in by the relevant enterprises. The applicant enterprise is responsible for the document taken as basis in the transactions to be carried out within the scope of the Regulation and for any information contained in the statement in question.
Benefits obtained through transactions based on false and misleading information and documents shall not be considered as vested rights.
Declarations can be made in writing to the relevant institution or electronically. You can access the relevant regulation and the business declaration in its annex here.
Sincerely,
BİLGENER
