The Decree Amending the Incentives in Investments Decree ("Amending Decree") was published in the Official Gazette on April 08, 2015.
Amending Decree introduced new priority investment sectors and additional investment sectors. Moreover, it decreased the minimum investment amounts for certain investments.
Decreased the minimum investment amounts at certain sectors
The Amending Decree reduced the minimum investment amounts for sectors that are benefited from regional investment incentives as set forth below;
- TRY 1.000,000 in terms of investments in manufacturing of chemical and herbal based products utilized in pharmaceutics/medicine and medical take place in the 1st and 2nd investment region, and TRY 500,000 in case these investments take place in the 3rd, 4th and 5th investment regions,
- TRY 1.000,000 in terms of investments in manufacturing of office, accounting and data processing machines take place in the 1st and 2nd investments region, and TRY 500,000 in case these investments take place in the 3rd, 4th and 5th investment regions,
- TRY 1.000,000 in terms of investments in manufacturing of radio, television and communication machinery and equipment take place in the 1st and 2nd investment regions, and TRY 500,000 in case these investments take place in the 3rd, 4th and 5th investment regions
- TRY 1.000,000 in terms of investments in maintenance and repairs aircrafts and its engines take place in the 1st and 2nd investment regions, and TRY 500,000 in case these investments take place in the 3rd, 4th and 5th investment regions.
Furthermore, Amending Decree has abolished the threshold of minimum investment amount TRY 20.000,000 in the field of national defence investments based upon an approval of Ministry of Defence in order to be recognized as priority investment. Thus, investments in the field of national defence based upon an approval of Ministry of Defence is recognized as priority investment without a minimum investment amount requirement.
New priority investment sectors
Amending Decree introduced new priority investment sectors that may benefit from stronger incentives of investment region 51 with a higher rate of tax reduction and interest support rates. Those new priority sectors are indicated below;
- The investors having a valid Mining License or Certificate according to Mining Law may profit from stronger incentives on their mining exploration investments.
- The investments in regard to manufacturing of products in the category of high technology industrial according to definition of technology intensity of OECD (US 97- Code:2423,30,32,33 and 353)
On the other hand, the investments on generation of blood products, oncology and biotechnology medication with a minimum investment amount of TRY 20.000,000 is removed from privileged investment section.
New investment sectors
Generation of electricity based on natural gas investments now on may profit from incentives on the condition that (i) being a new and expansion investments for which a license is obtained from the Energy Market Regulatory Authority, and (ii) modernisation form of investments intend to lower its specific fuel consumption by at minimum 15%.
Amending Decree introduces a new article that allows investors to benefit from reduced corporate or income tax to be applied capital expenditure take place between 1/1/2015 and 31/12/2016 having an incentive certificate for their incomes provided from other investing activities with the thresholds indicated within the Amending Decree.
Another significant change being introduced by the Amending Decree is that the import of machinery and equipment may be permitted for which incentive certificate application has been filed but not issued provided that tax and deductions' total amount is deposited as a security that may exempt under incentive certificate.
One should bear in mind that according to the Amending Decree the permission duration for such import can be six months. If the incentive certificate has not been issued within said duration investors may apply for an extension within three months subsequent to the end of six months duration. If the investors miss the extension period, the investors may apply for an extension within two months from the date of April 08, 2015 on the condition that the security deposited has not been recorded as income.
It is important to note that upon request of the investors the favourable provisions of the Amending Decree may be implemented to the incentive certificates being obtained after January 01, 2012.
1 Investment Region 5 consists of Adıyaman, Aksaray, Bayburt, Çankırı, Erzurum, Giresun, Gümüşhane, Kilis, Niğde, Kahramanmaraş, Ordu, Osmaniye, Sinop, Tokat, Tunceli, Yozgat
Originally published June 2015
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