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Investment Incentives In Turkey

Turkey's Investment Incentive System

Investment Incentive systems in Turkey reduce regional development differences, increase foreign direct investments, support advanced technology investments, make investment planning on the basis of economies of scale, Increase the production of intermediate goods and products with high import dependency in order to reduce the current account deficit, It has many purposes such as supporting high technology investments, increasing the effectiveness of support elements, and supporting clustering activities.

Some elements of Support in the Investment Incentive System in Turkey are as follows:

VAT EXCLUSION AND REFUND – According to the regulation, the deliveries and services made from 1/5/2022 regarding the construction works within the scope of the certificate to taxpayers holding investment incentive certificates for the manufacturing industry and tourism, to be implemented until 31.12.2025, are exempt from VAT.

The VAT collected for the building-construction expenditures made within the scope of Strategic Investments with a fixed investment amount of more than 500 million Turkish Liras is refunded.

CUSTOMS TAX EXEMPTION – No additional customs duty will be applied to the imports made by taking advantage of the customs duty exemption within the scope of the investment incentive certificate. The regulation came into effect from 1 January 2023. The decision will also apply to investment incentive certificates issued before 1 January.

TAX REDUCTION is the application of income or corporate tax at a discount until it reaches the amount of contribution foreseen for the investment. This support is provided within the scope of incentive certificates issued within the framework of strategic investments, regional incentive applications and priority investments incentive applications.

INTEREST AND DIVIDEND SUPPORT-This support is the Ministry’s coverage of a certain portion of the interest or dividend payable for the loan used, up to 70% of the fixed investment amount registered in the Incentive Certificate.

INVESTMENT PLACE ALLOCATION- Investment location can be allocated for strategic investments, regional and priority investments for which Investment Incentive Certificate has been issued, within the framework of the procedures and principles determined by the Ministry of Environment, Urbanization and Climate Change (General Directorate of National Real Estate).

INSURANCE PREMIUM EMPLOYER’S SHARE SUPPORT – It is an incentive element that provides the Ministry of Industry and Technology to cover the minimum wage of the employer’s share of the insurance premium, which is required to be paid to the Social Security Institution for additional employment provided by investment, based on the incentive certificate.

INSURANCE PREMIUM SUPPORT- Investment Incentive Certificate is covered by the Ministry for 10 years to cover the minimum wage of the worker’s share of the insurance premium to be paid for additional employment provided by investment.

PRIORITY INVESTMENTS THAT ARE REGISTERED

-Investments in the production of high-tech products

-Investments in the production of products obtained as a result of R&D projects

-Investments in defense

-Test center investments for medium-high and high technology products

-Certain automotive and engine investments

-Mining and mineral exploration investments

-Training investments (including training investments for the use, repair and maintenance of aircraft)

-Investments in energy efficiency

-Electricity generation investments through waste heat recovery

– Liquefied natural gas (LNG) and underground natural gas storage investments

-Domestic coal-based thermal power plants

-Investments in carbon fiber or integrated composite material production.

-Railway transportation

-Maritime transport

-Airways transporting

-Mid-high technology investments with a minimum amount of 500 million TL

-Investments in turbine and generator for renewable energy production and blade manufacturing used in wind energy production

-Directly cooled slab casting and hot rolling method

integrated investments in the production of aluminum flat products.

– Tourism accommodation investments to be made in Culture and Tourism Conservation and Development Regions or in thermal tourism

– Nuclear power plant investment

-Laboratory investments of a certain nature

– Licensed warehousing investments

-Investments subject to environmental license

-At least 25 million TL worth of automation-based greenhouse investments containing 25 decares or more of domestic components.

– Elderly-Disabled care centers and wellness investments

-R&D and environmental investments

-Manufacture of electric or hydrogen powered transportation vehicles

-Data center investments in certain standards that meet the minimum white area requirement of 5,000 m²

-Investments in the production of carrier columns and transmission columns from vulcanized rubber

-Investments within the scope of the Digital Transformation Support Program

-Investments within the scope of the Green Transformation Support Program

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