Turkish Cabinet has announced a new decree on 15th June 2012, numbered 2012/3305 and published on official gazette of 19th June 2012.
As defined in article 1 of the decree, the purpose of this Decree is to determine the procedures and activities related to the research and development activities for development plans and annual savings in line with the objectives envisaged in the programs directed to high value-added investments, production and increase employment, increase international competitiveness and a high content of research and development, the promotion of regional and large-scale investments and strategic investments, to increase foreign direct investment, regional reduce disparities, clustering and support for environmental protection investments.
Implementation of the provinces in terms of incentives within the scope of this Decree, taking into account the socio-economic development levels divided into six regions as specified Appendix-1 to the Decree.
Accordingly, cities of: Ankara, Antalya, Bursa, Eskişehir, İstanbul, İzmir, Kocaeli and Muğla have been defined in first region,
Adana, Aydın, Bolu, Çanakkale (except districts of Bozcaada and Gökçeada), Denizli, Edirne, Isparta, Kayseri, Kırklareli, Konya, Sakarya, Tekirdağ, Yalova have been defined in second region
Balıkesir,Bilecik,Burdur,Gaziantep,Karabük,Karaman,Manisa,Mersin,Samsun,Trabzon, Uşak and Zonguldak have been defined in third region;
Afyonkarahisar,Amasya, Artvin, Bartın, Çorum, Düzce,Elazığ,, Erzincan,Hatay,Kastamonu, Kırıkkale,Kırşehir, Kütahya,Malatya,Nevşehir, Rize,Sivas have been defined in fourth region;
Adıyaman,Aksaray,Bayburt, Çankırı, Erzurum, Giresun, Gümüşhane, Kahramanmaraş, Kilis, Nğde, Ordu, Osmaniye, Sinop, Tokat, Tunceli, Yozgat have been defined in fifth region;
Ağrı,Ardahan, Batman,Bingöl, Bitlis, Diyarbakır, Hakkari, Iğdır, Kars, Mardin, Muş, Siirt, Şanlıurfa, Şırnak, Van, districts of Bozcaada and Gökçeada have been defined in sixth region.
Incentive system consists of the promotion of incentives on general, regional, strategic and large-scale investments basis.
However some products and services defined in specific industries such as agriculture and agricultural industry, manufacturing, energy and mining are either not covered or partially covered by new incentive scheme.
Investments in order to benefit from incentives must be at least one million Turkish Lira for the 1st and 2nd regions; five hundred
thousand Turkish Lira for the 3rd, 4th, 5th and 6th regions must be five hundred thousand Turkish Lira or meet the requirements as defined in article 8 of the decree saying that the investments that providing that all of the following criteria, for the production of products with high import dependence is considered a strategic investment.
a) The minimum fixed investment amount is above fifty million Turkish Lira (to meet the energy needs of these investments will be held exclusively non-energy investments are based on natural gas, the plant with an installed capacity including balancing part).
b) Investment of the total production capacity of the domestic product is less than imports.
c) The principles to be specified by the Ministry, the document a minimum of forty percent of the added value of the investment is to be provided.
d) Investment in relation to the product within the last year the total amount of imports on the U.S. Dollar is fifty million.
(2) for the production of foreign investments in the production of products that are not stated in paragraph (d) the provision of the refinery and petrochemical investments (c) the provision is not required.
Incentive support depending on specified criteria are as follows;
Customs duty exemption. Value Added Tax (KDV) exception, Income tax withholding support (only in 6th region), support for employer for share of insurance premium (for investments in shipbuilding yards),Tax relief, land allocation, Interest Support ( in 3rd, 4th, 5th and 6th regions).
Applications should be submitted to the Ministry of Economy.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.