Free Trade Zones (FTZ) in Turkey provide infrastructure, open
and covered warehousing and ready-to-use factory sites to
Free Trade Zones are outside customs territory and hence,
neither tariffs nor duties apply to goods that are imported into
Free Trade Zones. Companies registered at Free Trade Zones can
stock their goods for unlimited period of time. Manufacturing
companies operating in free trade zones enjoy exemption from the
corporate tax, VAT, employee income tax and stamp tax. Sales from
free trade zones to the domestic market are permitted.
There are 20 free zones in Turkey operating close to the EU and
Middle East markets adjacent to major Turkish ports on the
Mediterranean, Aegean and Black Seas, with easy access to
international trade routes.
The following incentives are granted to investors investing into
Free Trade Zones;
The income derived from the sale of goods manufactured by the
license holders in the Free Trade Zones is exempted from corporate
The corporate income tax exemption does not cover the dividend
distributions. The dividends of a company in Free Trade Zones are
subject to the dividend withholding tax at the standard rate of 15%
at source when they are paid to an individual shareholder (resident
or non-resident) or to non-resident corporations.
Where international or bilateral treaties are in place between
Turkey and the investor's country of origin, the related terms
of that treaty will principally be applied, to the extent
The salary payments made by taxpayers operating in Free Trade
Zones to employees are exempted from the income tax, provided that
the taxpayers export at least 85% FOB values of annually produced
goods. It should be noted that the Council of Ministers is
authorized to decrease this rate down to 50%.
Documents and transactions regarding the operations in Free
Trade Zones are exempted from the stamp tax and charges.
In addition to the above incentives, the delivery of goods and
performance of services in Free Trade Zones are excluded from VAT
without any time limitation
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.
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