In an effort to reach Turkey’s long-term macroeconomic targets of increasing Turkey’s world trade share, ensuring the security of supply, improving Turkey’s rank in production of information, technology and innovation, and facilitating the transition to a production structure based on design and marks with high added value, the Turkish Parliament adopted a new comprehensive package law, the “Law on Supporting Investments on Project Basis and Amending Certain Laws and Decree Laws” No. 6745 (“Law“) which was published in the Official Gazette on September 7, 2016.
What the Law Says
Within the scope of the Law, the Council of Ministers will be entitled to grant tax incentives, supports or donations for the projects that are to be financed by the Ministry of Economy and meet the qualifications set out below, separately or collectively:
|(i)||address Turkey’s current and prospective needs in line with its targets set forth in national development plans and annual programs;|
|(ii)||ensure the security of supply;|
|(iii)||reduce foreign dependency;|
|(iv)||provide technological change; and|
|(v)||be innovative, R&D intensive and with high added value.|
The Council of Ministers may decide that one or more of the following benefits may be granted to eligible investment projects:
If the investment is not duly completed, all taxes that cannot be collected in time due to reduced corporate income tax application, tax exemption and income tax withholding support will be collected with delay interest without being subject to any tax loss penalty. Other incentives granted will be taken back within the scope of the Law on Collection Procedure of Public Assets.
In cases where the investment is transferred, the transferee company may benefit from the same benefits and exemptions, provided that the conditions set forth in the Law are fulfilled.
These incentives are among the precautions taken after the coup attempt to vitalize the Turkish economy; to mitigate the attempted coup’s adverse effects; and to make investment in Turkey more attractive.
Affected taxpayers who wish to carry out new investment projects should be aware of the new tax reliefs and support provided in the Law.