The unpaid debts of municipalities will be deducted from their budgets.

Local special administrations and municipalities, as well as legal entities in which they hold more than half of the capital, may have deductions made from the relevant local administration share for tax and Social Security Institution (SGK) debts.

The Presidential Decision regarding the matter has been published in the Official Gazette and has come into effect.

UNPAID DEBTS OF MUNICIPALITIES WILL BE DEDUCTED FROM THEIR BUDGETS

With the amendment made, the definition of "legal entity" has been added, and the companies of local special administrations and municipalities have also been included in the scope.

Accordingly, a legal entity is defined as "a legal entity in which local special administrations and municipalities, along with their affiliated organizations, directly or indirectly hold more than half of the capital, either jointly or separately."

Thus, deductions can also be made from the relevant local administration share for the tax and SGK debts of these legal entities.

Additionally, the institutions listed in the annex to the decision have been updated.

In the previous situation, the tax and SGK debts of local administrations and their affiliated organizations could be deducted from the shares they received from the general budget tax revenues under the "Law on the Distribution of Shares from General Budget Tax Revenues to Local Special Administrations and Municipalities."

The debts of companies belonging to the administrations had been excluded from the scope by a decision of the Council of Ministers.