Investment Incentives
For detailed information; https://www.en.torunhukukburosu.com/investment-incentives/
1.General Matters
Turkey’s investment incentive system, launched in April, 2012, became effective by the “Council of Minister’s Decree No. 2012/3305 on Government Subsidies for Investments” of June 15, 2012. The Regulation No. 2012/1 defines procedures and principles for the implementation of the Decree. It covers both the investments to be made by Turkish citizens and the direct investments to be made by foreign investors.
The investment incentive system consists of general incentive applications, regional incentive applications and incentives to be given to strategic investments.
In order to benefit from the investments support elements, the project must be approved by the Ministry of Industry and Technology and an incentive certificate must be issued.
According to Article 4 of the Incentive Decree, real persons, ordinary partnerships, capital companies, cooperatives, unions, business partnerships, public institutions and organizations, professional organizations, associations and foundations, and foreign companies’ branches in Turkey can apply to Incentive Certificate.
Applications can be made by the authorized user through the E-TUYS application on the website of the Ministry of Industry and Technology.
2.Scope and Implementation Conditions of Investment Support Elements
a.Customs Duty Exemption
It is applied in the form of non-payment of customs duty for investment goods, machinery and equipment to be procured from abroad.
b.Value Added Tax (VAT) exemption
It is applied in the form of non-payment of value added tax for investment goods, machinery and equipment, software and intangible rights sales and rentals to be procured from within the country and abroad.
c.Income tax withholding support
It is the cancellation of the part of the income tax withholding to be paid for the additional employment provided by the investment within the scope of the Investment Incentive Certificate, corresponding to the minimmon wage, for 10 years. It is only stipulated in the incentive certificates issued for investments to be made in the 6th region. It can also be applied for strategic investments supported under the Technology Oriented Industrial Move Program.
d.Employer’s national insurance contribution support
It is the Ministry’s coverage for a certain period of time for the employer’s national insurance contribution (corresponding to the minimum wage) to be paid for additional employment provided by the investment within the scope of the Investment Incentive Certificate. It is applied for incentive certificates issued within the scope of strategic investments, regional and priority investments incentive practices.
e.Tax Deduction
It is the application of income or corporate tax at a discount until the amount of contribution foreseen for the investment is reached. This support is provided within the scope of incentive certificates issued within the framework of strategic investments, regional incentive practices and priority investments incentive practices.
f.Employee’s National Insurance contribution Support
The insurance premium to be paid for the additional employment provided by the investment within the scope of the Incentive Certificate is covered by the Ministry for a period of 10 years, corresponding to the minimum wage. Except for the general incentive applications, it is only stipulated in the incentive certificates issued for the investments to be made in the 6th Region. It can also be applied to strategic investments supported under the Technology Oriented Industry Move Programme.
g.Interest or Dividend Support
It is a financial support provided for loans with a maturity of at least one year used within the scope of the Investment Incentive Certificate. A certain part of the interest or dividend payable for the loan used up to 70% of the fixed investment amount registered in the incentive certificate is covered by the Ministry. This support element is applied for investments to be made within the scope of strategic investments, regional incentives and priority investment incentive applications in the 3rd, 4th, 5th and 6th Regions.
h.Investment Place Allocation
An investment location can be allocated within the framework of the procedures and principles determined by the Ministry of Environment and Urbanization (General Directorate of National Real Estate) for strategic investments, regional and priority investments for which Investment Incentive Certificate has been issued.
ı.VAT Refund
Building-construction expenditures to be made within the scope of strategic investments over 500.000.000 Turkish Liras can be benefited from VAT refund.
3.Minimum Fixed Investment Amount
In order to benefit from the support elements, minimum fixed investments amount
In General Incentive Practices; 3,000,000 TL in 1st and 2nd zones, 1.500.000 TL in 3rd, 4th, 5th and 6th zones
In Strategic Investments ; 50.000.000 TL
In Regional Incentive Practices; Starting from 1,500,000 Turkish Liras, it must be as much as the amount determined for each supported sector and each province.
In addition, investments that will benefit from the supports must also meet the other minimum capacity, fixed investment amount and other conditions, if any.
Yalçın TORUN Attorney at Law
Warning
The above written text on our website is copyrighted to Attorney Yalcın TORUN. This written content is preserved over time with an electronic signature for the purpose of identifying ownership of intellectual property rights. The written texts on our website can be freely used by our fellow lawyers in their petitions; however, we do not permit the full, partial, or summarized publication of the texts on other websites without proper attribution.