Turkey collection profile



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2014: 69/189 countries
2013: 72/189 countries

Complexity of collecting debt:

Notable High Very High Severe

Executive summary

  • The paying behavior of domestic firms has significant margin for improvement and normal payment terms may seem excessive. In fact, as a result of a long payment duration trend, the value of unpaid receivables has grown considerably in recent years.
  • Domestic courts lack independence, the rule of law perception is moderate, and the chances of obtaining debt payment through legal action are lower than through strong pre-legal negotiation efforts.
  • Debt renegotiation proceedings before the courts are not generalized and when it comes to insolvency issues liquidation remains the default proceeding even though liquidation sales rarely yield efficient results and may thus not be in the creditors' best interest.
General Information GENERAL INFORMATION arrow-transparent
Collection Practices COLLECTION PRACTICES arrow-transparent
Court Proceedings Court PROCEEDINGS arrow-transparent
Insolvency Proceedings INSOLVENCY PROCEEDINGS arrow-transparent
General Information 


Days Sales Outstanding (DSO)

The paying behavior of domestic firms has significant margin for improvement. Whilst parties are free to determine their own rules for payment terms, average delays of up to 30 days must be expected. As a result of this long payment duration trend, the value of unpaid receivables has grown considerably in recent years. In 2015, the average DSO for listed companies was 83 days.​


Late payment interest

A buyer would normally be considered in default when the invoice has not been paid after 30 days as of the date of receipt, or following the delivery (if the receipt date of the invoice cannot be determined). Interest on late payment may then be charged to the debtor as prescribed through a contract or taking the 11,75% interest rate (per annum) normally applied by courts (under Law No. 3095 on Legal Interest and Default Interest). Late payment interest often constitutes a negation tool during the amicable collection phase but may be added to the claim when legal action commences. In most cases, the courts would then calculate interest automatically.

Collection costs must be settled as provided in the contract but would be rarely charged to the debtor in practice and would rather serve as a negotiation tool. Even if there is no related clause in the contract, when legal action is commenced the court would normally order the defeated party to pay collection costs (Law No. 6100 on Civil Procedures, Law No.492 on Charges).

collection practice 


Orchestrated negotiation first

Given the difficulty in obtaining timely decisions from domestic courts, amicable settlement opportunities should always be considered as the best alternative to formal legal proceedings. Before starting legal proceedings against a debtor, in addition, assessment of assets is important as it allows verification as to whether the company is still active and whether recovery chances are good. In addition, it is essential to be aware of the debtor’s solvency status: if insolvency proceedings have been initiated, it indeed becomes impossible to enforce a debt (see below). Legal dunning then ought to start with a registered Demand Letter recalling the debtor its obligation to pay the principal together with late payment interests, however in practice it is very important to rely on a collection agency with local correspondents as those will be able to establish a dialogue with the debtor. Obtaining transactions in the form of a debt instalment is rather satisfactory, but if the debtor rejects discussions, having a collection specialist threatening to commence execution proceedings at Bailiff’s Office usually helps exercising further pressure.

Court Proceeding 


Turkey has a Civil Law system inspired from Swiss, German and French law, and in which the judiciary is made of two distinct bodies of law. On the one hand, the 'ordinary jurisdiction' divides into Courts of Ordinary (Civil and Criminal) Jurisdiction rendering decisions in first instance, District Courts of Appeal and a Court of Cassation acting as the court of final jurisdiction on civil law matters. In relation to business, disputes are dealt with by specialized commercial (Ticaret Mahkemeleri), intellectual and Industrial property (Fikri ve Sinai Haklar Mahkemeleri), labor (İs Mahkemeleri) or enforcement (İcra Mahkemeleri) courts. On the other hand, the 'administrative jurisdiction' exclusively focuses on disputes involving public bodies through Tax and Administrative Courts in first instance, District Administrative Courts acting as Appellate Courts and a Council of State acting as the final jurisdiction instance. Overall, although Turkish authorities emphasize that the country has lately made significant efforts to harmonize domestic rules with EU standards, the judiciary is not fully independent, business lawsuits remain slow and costly, and there is overall some margin left to improve the rule of law perception in the country.

When the debt is certain and undisputed, The Law No. 2004 on Execution and Bankruptcy provides for fast-track Payment Order proceedings before the Bailiff’s Office for the recovery of the debt. The debtor is then summoned to pay or submit its objections within seven days (five days if the debt stems from a bill of exchange) from the service date of the Payment Order. If the debtor stays silent, the creditor may obtain attachment of the debtor's movable and immovable properties (including bank accounts) and also debtor’s receivables from third parties. If the debtor brings a defence, the claim must however be solved through an ordinary lawsuit. Ordinary legal action would usually commence when amicable collection has failed. The creditor would file a claim with the court and notify the debtor, which is given up to two weeks to file a defence. The parties are then given an opportunity to exchange arguments and evidence but, prior to rendering a decision the court would normally encourage the parties to negotiate a compromise (rarely achieved in practice). The courts normally award remedies in the form of damages, specific performance, declaratory judgments or injunctions (to do or abstain from doing something) but punitive damages are not available.

insolvency Proceeding 


The liquidation and bankruptcy procedure of a company in Turkey is governed by the Turkish Commercial Code (Law No. 6102) and the Execution and Bankruptcy Law (Law No. 2004). In 2003/2004, amendments to the Execution and Bankruptcy law indeed led to introducing additional procedures when banking institutions realized that supporting debtors facing economic turmoil (through restructuration procedures) could be more constructive and efficient than merely organizing their liquidation. Several Turkish institutions have since then entered into a consensual framework agreement and elaborated separate debt restructuring agreements with large debtors ('Istanbul Approach') and small/medium size debtors too ('Anadolu Approach').


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