The new investments at the provinces within the scope of the law benefits from the supports and incentives stated in article 3,4 and 6 of this law, for the following periods:

– Till the date of 31/12/2012 if the investment finishes until 31/12/2007 under conditions stated in article 4
– 5 years if the investment finishes until 31/12/2007
– 4 years if the investment finishes until 31/12/2008
– 3 years if the investment finishes until 31/12/2009 (Law numbered 5084a7/h)

1.Income Tax Withholding Incentive
The burden on the employment is decreased as the income tax amount which is assessed due to the new recruitment is cancelled on the income withholding tax declaration of the employer. (Law numbered 5084 a.2, a.3, General Communiqué of support for investment and employment serial number 1 and number 2)

The income tax withholding incentive stated at Law numbered 5084 article 3 for the investments completed until the date of 31/12/2004, is ended at the date of 31/12/2009.

On the other hand, according to the article 7/h of Law numbered 5084, the period for benefiting the income tax withholding incentive due to the new investments at the provinces stated at this law shall be applied as follows:

• 5 years starting from the date of completion for the investments completed between 01/01/2005-31/12/2007
• 4 years starting from the date of completion for the investments completed between 01/01/2008-31/12/2008
• 3 years starting from the date of completion for the investments completed between 01/01/2009-31/12/2009

Besides, the businesses at Bozcada and Gökçeada which are the districts of Çanakkale province; shall benefit from the income tax withholding incentive stated at Law numbered 5084 article 3 for five years (up till 4/4/2012) starting from the date of 04/04/2007 in case they fulfill the conditions stated at this article .(03/03/2010 dated and 2010-2 numbered Incentive for Investment and Employment Circular)

2.Employer’s Contribution in Insurance Premium Incentive
The employer’s contribution in insurance premiums which are assessed on the incomes base for the premiums according to the law numbered 506 articles 72 and 73 for the newly recruited workers, who are employed by the income or corporate tax payers at the provinces within the scope of the incentive law, are fully or partly paid by the Treasury. (Law numbered 5084, a.4)

3.Free Investment Place Allocation
Terrain or land belongs to the Treasury, supplementary budgeted institutions, municipalities or provincial administrations shall be transferred or certificate of occupancy shall be given to the real or legal persons who invest in the provinces stated at the law with a minimum of 30 employees. (Law numbered 5084, a.5)

4.Energy Support
20% of the electricity expenditures of the investments between 01/04/2005-31/12/2008 in the provinces stated in law on livestock (fishery products and chicken farming included), greenhouse, certified seed raising and cold stores which has minimum 10 employees and on manufacturing, mining, accommodations for tourism, education or health which has minimum 30 employees, are paid by the Treasury. (Law numbered 5084, a.6)

5.Excise Tax Support
The deliveries of the following goods stated at Annex I list Table (A) of Excise Tax Law until 31/12/2012 are exempted from excise tax:

• 19.61.00.11, 2710.19.63.00.11, 2710.19.65.00.11 and 2710.19.69.00.11 T.C.T.T (Turkish Customs Tariff Code) numbered goods delivered to be used in production of electricity
• 19.41.00.11, 2710.19.41.00.13 and 2710.19.45.00.12 T.C.T.T numbered goods delivered to be used in production of electricity to the plants which uses natural gas as primary combustible, fuel as secondary combustible with the order and approval of Energy and Natural Resources Ministry. (ETL Artificial article 5) (Excise Tax General Communiqué 15)6.Incentives Stated in 2464 Numbered Revenues of Municipalities Law
  Buildings and plants constructed at organized industry regions and industry and small crafts sites are exempt from building construction duty and duty of the certificate of occupancy. (Revenues of Municipalities Law a. 80)

7.Incentives Stated in 131 Numbered Real Estate Tax Law
The income and corporate taxpayers, who has the certificate of tourism enterprise within the scope of Encouragement of Tourism Industry Law, are exempt from tax for five years beginning after the following year of construction or the date of certification as tourism enterprise in case a current building is allocated for that purpose. (Real Estate Tax Law a.5/b)

The buildings in organized industry regions and small crafts sites are exempt from tax for five years beginning after the budget year when construction is finished. (Real Estate Tax Law a.5/f)

Source: Revenue Administration

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Source: The Union of Chambers and Commodity Exchanges of Turkey

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

The proportion of one-family households increased
One-family (nuclear family) is defined as families comprising a couple without children, or a couple with at least one child, or a lone-parent with at least one child. Within the scope of this definition, according to the results of ABPRS; while the proportion of one-family households in our country was 67.4% in 2014, this proportion was 66.4% in 2016. While the proportion of one-family households was 13.9% in 2014, it was observed that this proportion increased to 14.9% in 2016.

As the proportion of extended family households which cover multi-family households or at least one nuclear family with non-family member(s) was 16.7% in 2014, this proportion was 16.3% in 2016. It was observed that while the proportion of multi-person households without nuclear families was 2.1% in 2014, it increased to 2.4% in 2016.

Proportion of households by type, 2014-2016

Tunceli had the highest proportion of one-person households
The province which had the highest proportion of one-person households was Tunceli with 24.9% in 2016. This province was followed by Giresun with 22.8% and Eskişehir and Gümüşhane with 22.6%, respectively. The province which had the lowest proportion of one-person households was Diyarbakır with 8.3%. This province was followed by Batman with 8.7% and Van with 8.8%, respectively.

The proportions of one-person households by first 5 provinces, 2016

Kayseri had the highest proportion of one-family households
The province which had the highest proportion of one-family households was Kayseri with 72.6% in 2016.   Kayseri was followed by Osmaniye with 71.9% and by Ankara with 71.3%. The province which had the lowest proportion of one-family households was Şırnak with 55.3%. This province was followed by Kastamonu with 56.6% and Tunceli with 57.2%.

The proportions of one-family households by first 5 provinces, 2016

Lone-parent with at least one child families constituted 8.2% of households
The proportion of lone-parent with at least one child families in total households was 8.2% in Turkey in 2016. When it was analyzed in more detail, 1.7% of total households were lone-father with at least one child families, 6.5% was lone-mother with at least one child families.

İzmir had the highest proportion of lone-parent with resident children families
The provinces with the highest proportion of lone-parent with at least one child families were in İzmir with 10%, Adana with 9.8% and Malatya with 9.7%, the provinces with the lowest proportion were in Bayburt with 5.8%, Tokat with 5.9% and Bitlis, Nevşehir, Burdur and Yozgat with 6.2% in 2016.

The provinces with the highest proportion of lone mothers with at least one resident child were İzmir with 7.9%, Adana with 7.8% and Bingöl and Hatay with 7.7%, the provinces with the lowest proportion were   Bayburt with 4.5%, Ardahan with 4.6% and Tokat with 4.7%. The provinces with the highest proportion of lone fathers with at least one resident child were Malatya with 2.6%, Gümüşhane with 2.5% and Iğdır and Kilis with 2.4%, the provinces with the lowest proportion were Nevşehir, Kayseri and Tokat with 1.2%.

Şırnak had the highest proportion of extended family households
The province which had the highest proportion of extended family households was Şırnak with 29.9% in 2016. This province was followed by Hakkari with 26.4% and Batman with 25.9%. The province which had the lowest proportion of extended family households was Çanakkale with 10.3%. This province was followed by Eskişehir with 10.5% and Balıkesir with 11.2%.

The proportions of extended family households by first 5 provinces, 2016

Females didn’t complete their education mostly for the reason of their families’ not allowing
According to the results of family structure survey, 2016; the proportion of the individuals aged 15 and over, who didn’t complete education even though they wanted to continue, was 18.3%. When the reasons for the individuals who didn’t complete education was analyzed; it was seen that the first reason was economic reasons with 45.5%, the second one was the family’s not allowing with 22.7% and the third one was failure in education with 12.3%.

When the reasons for the individuals who didn’t complete education was analyzed by sex; it was observed that while males didn’t complete their education mostly for the reasons of economic reasons with 58.7%, failure in education with 16.6% and the family’s not allowing with 7.5%, females didn’t complete their education mostly for the reasons of the family’s not allowing with 38.1%, economic reasons with 32.3% and getting married/engaged/becoming mother/being pregnant with 9.5%.

Individuals met with their spouses by family and relative network mostly
According to the results of family structure survey, 2016; when the social networks where the individuals aged 15 and over and who had experienced marriage, met with their spouses was examined; it was seen that 49.8% of the individuals met their spouses by family and relative network, 28.2% met their spouses by neighborhood network, 10.3% met by friends network (outside school and work) throughout the country. When how individuals met their spouses was analyzed by sex; it was seen that 47.8% of males and 51.5% of females met with their spouses by family and relative network.

23.2% of the individuals stated that they were relative with their spouses
According to the results of family structure survey, 2016; when it was examined whether the individuals who were aged 15 and over and had experienced marriage were related to their spouses; it was observed that 23.2% of the individuals were relative with their spouses.

According to Statistical Regions (SR) Level 1; the region which had the most common consanguineous marriage was TRC South East Anatolia (Gaziantep, Adıyaman, Kilis, Şanlıurfa, Diyarbakır, Mardin, Batman, Şırnak, Siirt) with 42.6%. The region which had the lowest observation on consanguineous marriage was TR2 West Marmara (Tekirdağ, Edirne, Kırklareli, Balıkesir, Çanakkale) with 8.9%.

Females were decision maker on house layout while males were on holiday and entertainment
According to the results of family structure survey, 2016; when the decision makers on some selected issues for individuals aged 15 and over living in household was analyzed by sex; it was seen that females had decision making priority on house layout with 78.1%, shopping with 58% and relations with neighbors with 56.1%, respectively. Males were decision maker on holiday and entertainment with 70.6%, house selection with 65.9% and relations with relatives with 59.7%.

Females spent 5 times more time than males on household and family care
According to the results of time use survey, 2014-2015; when the time spent on household and family care activities by individuals aged 15 and over was examined; it was seen that the average time for this activity was 2 hours 45 minutes per day. While males spent 53 minutes, females spent 4 hours 35 minutes for this activity. When the time spent on household and family care was analyzed by employment status; it was seen that while employed individuals aged 15 and over spent 1 hour 34 minutes, non-employed individuals spent 3 hours 47 minutes per day on average.

When the time spent on household and family care was analyzed by employment status and sex; it was seen that while employed males spent 46 minutes, employed females spent 3 hours 31 minutes per day on average. For household and family care activities, non-employed males spent 1 hour 7 minutes and non-employed females spent 4 hours 59 minutes.

14.5% of time allocated to household and family care was spent on child care
According to the results of time use survey, 2014-2015; when time distribution in household and family care for the individuals aged 15 and over was examined, it was seen that 14.5% of this time was allocated to child care. While males allocated 17.2% to child care of total time spent to household and family care, females allocated 14.1% to child care.

Istanbul had the highest number of foster parents
According to Ministry of Family and Social Policy’s data; throughout Turkey by the date of 8 May 2017, number of foster parents was 4 thousand 242. Examining the number of foster parents by province, it was seen that Istanbul had the highest number with 386 foster parents. Istanbul was followed by İzmir with 310, Ankara with 254, Kayseri with 160 and Kocaeli with 140 foster parents, respectively.

53.5% of the individuals didn’t want to be foster parent
According to the results of family structure survey, 2016; when individuals aged 15 and over were asked whether they wanted to be foster parent or not, 30.4% of them stated that they wanted to be a foster parent, 53.5% of them did not want to be a foster parent and 16.1% of them did not have any information about it. The proportion of males who wanted to be a foster parent was 28.2% and the proportion of women was 32.6%.

When the proportion of willingness to be a foster parent was examined by SR Level 1; the region with the highest proportion of individuals who stated that they wanted to be a foster parent was TR9 East Black Sea (Trabzon, Ordu, Giresun, Rize, Artvin, Gümüşhane) with 42.4% and the region with the lowest proportion was TRC Southeast Anatolia with 17.2%.

Relatives and neighborhood were visited mostly for exchanging greetings in religious holidays
According to the results of family structure survey, 2016; when individuals’ aged 15 and over frequencies of visits to relatives and neighborhood in special situations were examined, it was seen that they visited their relatives and neighborhood mostly for exchanging greetings in religious holidays with 65.4%.

It was seen that exchanging greetings in religious holidays was followed by to give condolences with 61.6%, to ceremonies and celebrations such as wedding with 59.3%, visiting patients with 56.7%, to see the new born baby of acquaintance with 49.5%, visiting graves with 47.5%, to bid farewell and to greet an acquaintance for military service with 46.9%, upon their return from pilgrimage with 46.8% and to celebrate the newly purchased home of acquaintance with 45.9%, respectively.

Families made individuals happiest
According to the results of life satisfaction survey, the proportion of the individuals aged 18 and over who stated that their families made them happiest was 70.2% in 2016. While the proportion of males who mentioned that their families made them happiest was 76.3%, this proportion was 64.3% for females.

74.4% of the individuals stated that their families were happy
According to the results of family structure survey, 2016; when having been examined how the individuals aged 15 and over assessed their families’ general level of happiness, 74.4% of them stated that their families were happy, 20% of them stated that their families’ general level of happiness was neither happy nor unhappy and 5.7% of them stated that their families were unhappy.

SR Level 1, the region with the highest proportion of individuals who stated that their families were happy was TR7 Central Anatolia (Kırıkkale, Aksaray, Niğde, Nevşehir, Kırşehir, Kayseri, Sivas, Yozgat) with 81.1% and the region with the lowest proportion was TRC Southeast Anatolia with 64.9%.

Having fixed line telephone decreased as having mobile phone increased
According to the results of information and communication technology usage survey in households and by individuals; when the availability of devices in households was examined; it was seen that while the proportion of availability of desktop computers in households was 10% in 2004, it increased to 34.3% in 2011. This proportion showed tendency to decrease in the following years and was 22.9% in 2016.

While the proportion of availability of portable computer (laptop, tablet, netbook, etc.) in households was 0.9% in 2004, this proportion showed tendency to increase in the following years and was 49% in 2016. It was seen that while the proportion of availability of mobile phone (including smart phone) in households was 53.7% in 2004, it increased to 96.9% in 2016, as the proportion of availability of fixed line telephone was 81.6% in 2004, it was seen that this proportion decreased to 25.6% in 2016.

When the proportion of access to the Internet in households analyzed, it was seen that while this proportion was 7% in 2004, it was 76.3% in 2016.

21.9% of the individuals were below the poverty threshold
According to the results of income and living conditions survey; when at risk of poverty threshold was examined by taken equalized household disposable income criteria 60% into consideration, it was seen that the proportion of the individuals who lived below the poverty threshold was 21.9% in 2015. When the proportion of poverty by household types was analyzed; it was observed that 29.3% of households with one adult with at least one dependent children lived below the relative poverty threshold.

Dependent child is defined as a child who is under the age of 18 or in the age group of 18-24,   economically inactive and living with at least one parent. While the poverty rate of households having dependent children was 26.7%, it was 7.9% for the households having no dependent children.

The most important housing problem was inability of heating the dwelling due to isolation
According to the results of income and living conditions survey; when the ownership status of dwelling was examined; it was seen that 60.4% of the individuals were owner and 23.3% were tenant in their residence.

It was observed that 43% of individuals faced with problems about heating their dwelling due to isolation, 39% of individuals faced with problems about leaking roof, damp walls, floors or foundation, or rot in window frames of floor and 24.2% of them faced with pollution, grime due to traffic/industry or other environmental problems in 2015.

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Source: Turkish Union of Chambers and Commodity Exchanges

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Amongst the primary objectives of the new investment incentives scheme are:

• reduce the current account deficit;
• boost investment support for lesser developed regions;
• increase the level of support instruments;
• promote clustering activities; and
• to support investments that will create the transfer of technology.

Effective as of January 1, 2012, the new investment incentives system has been comprised of four different schemes. Local and foreign investors have equal access to:
1. General Investment Incentives Scheme
2. Regional Investment Incentives Scheme
3. Large-Scale Investment Incentives Scheme
4. Strategic Investment Incentives Scheme

The support instruments to be provided within the framework of the various investment incentives schemes are shown in the following table:

*Provided that the investment is made in Region 6.
**Provided that the investment is made in Regions 3, 4, 5 or 6 within the framework of the Regional Investment Incentives Scheme.
***For construction expenditures of strategic investments with a minimum fixed investment amount of TRY 500 million.

1- General Investment Incentives Scheme
Regardless of the region where investment takes place; all projects meeting both the specific capacity conditions and the minimum fixed investment amount are supported within the framework of the General Investment Incentives Scheme. Some types of investments are excluded from the investment incentives system and would not benefit from this scheme.
The minimum fixed investment amount is TRY 1 million in Region 1 and 2, and TRY 500,000 in Region 3, 4, 5 and 6.

Major investment incentive instruments are:

1) Exemption from customs duties:
Customs tax exemption for imported machinery and equipment f

2) VAT exemption:
VAT exemption for imported or domestically purchased machinery and equipment for projects with an investment incentive certificate.

2- Regional Investment Incentives Scheme
The sectors to be supported in each region are determined in accordance with regional potential and the scale of the local economy, while the intensity of support varies depending on the level of development in the region.

The minimum fixed investment amount is defined separately for each sector and region with the lowest amount being TRY 1 million for Region 1 and 2, and TRY 500,000 for the remaining regions.

The terms and rates of support provided within the Regional Investment Incentives Scheme are shown in the following table.

*OIZ: Organized Industrial Zones

The new investment incentives system defines certain investment areas as “priority” and offers them the regional support extended to Region 5 by the Regional Investment Incentives Scheme, regardless of the region of the investment. If the fixed investment amount in priority investments is TRY 1 billion or more, tax reduction will be applied by adding 10 points on top of the “rate of contribution to investment” available in Region 5. If priority investments are made in Region 6, the regional incentives available for this particular region shall apply.

Fields of investment with specific priorities to be supported with Region 5 instruments regardless of the investment’s region are:

• Tourism accommodation investments in Cultural and Tourism Preservation and Development Regions and investments that could benefit from regional incentives with regard to thermal tourism
• Mine extraction and/or processing investments
• Mining exploration investments to be made in the licensed areas by investors with a valid Exploration License or Certificate issued pursuant to the Mining Law
• Railroad and maritime freight or passenger transportation investments
• Investments in the defense industry to be made with respect to the project approval received from the Under secretariat for Defense Industry
• Test centers, wind tunnels, and similar investments made for the automotive, aerospace or defense industries
• Investments made by the private sector for kindergartens and day-care centers, as well as preschools, primary, elementary, and high schools
• International trade fair investments with a minimum indoor area of 50,000 square meters (excluding accommodation and shopping center units)
• Investments for the manufacturing of products or parts developed by an R&D project that is supported by the Ministry of Science, Industry and Technology, TUBITAK or KOSGEB
• Investments in the motor vehicles main industry worth a minimum amount of TRY 300 million, engine investments worth a minimum amount of TRY 75 million, and investments for motor engine parts, transmission components/parts and automotive electronics worth a minimum amount of TRY 20 million
• Investments for power generation where metals stated in the 4-b group of Article 2 of the current Mining Law No. 3213 within the scope of a valid mining license and permit issued by the Ministry of Energy and Natural Resources are used as inputs
• Investments for energy efficiency projects which are to be carried out at existing manufacturing industry facilities with minimum 500 TEP (ton equivalent petroleum) annual energy consumption, which would provide minimum 20% energy savings compared to the current situation, and with 5 years or less return on investment as a result of energy savings
• Investments for electricity generation through waste heat recovery in a facility (excluding natural gas-fired electricity generation plants)
• Liquefied natural gas (LNG) investments and underground gas storage investments with a minimum amount of TRY 50 million
• Investments for the production of carbon fiber or composite materials made ​​from carbon fiber provided that it takes place along with carbon fiber production
• Investments for the production of items in high-tech industry segment stipulated in the Organization for Economic Cooperation and Development’s (OECD) definition for technology intensity
• Priority investments with a minimum fixed investment amount of more than TRY 3 billion are considered to be strategic investments. Yet, the amount of interest support for these investments cannot exceed TRY 700,000.
• Investments for the production of turbines and generators used in renewable energy generation, as well as investments for the production of blades used in wind energy generation
• Integrated investments to produce aluminum flat products by hot rolling and direct chill casting techniques

Furthermore, together with the amendment to the incentives legislation on October 5, 2016, investments for the production of items in medium high-tech industry segment stipulated in the Organization for Economic Cooperation and Development’s (OECD) definition for technology intensity will be able to benefit from the instruments of Region 4 regardless of the location of the investment.

The investment subjects in question are as follows:

• Painting substances not classified elsewhere (NCE); inorganic products used as luminophore
• Sulphites and sulphates
• Phosphinates, phosphonates, phosphates and polyphosphates, nitrates
• Manufacture of other organic main chemical substances
• Manufacture of chemical fertilizers and nitrous compounds
• Manufacture of synthetic rubber and plastic raw materials
• Manufacture of glue and gelatin
• Modeling pastes; dentist’s wax, plaster-based preparations used in dentistry, fillers and compounds for fire extinguishers; prepared culture media used for the cultivation of microorganisms; not classified elsewhere (NCE) mixed reagents for laboratory or diagnostics use
• Doped chemical elements for use in electronics such as disks, scales etc.
• The preparations used in cleaning of metal surfaces; vulcanization accelerator substances; not classified elsewhere (NCE) plasticizer and stabilizer compounds for rubber and plastics; not classified elsewhere (NCE) reaction initiators, accelerators, catalysts; not classified elsewhere (NCE) alkalibenzene and alkalinaphtalene mixtures
• Manufacture of internal combustion engines and turbines (excluding aircraft, motorized vehicle and motorcycle engines)
• Manufacture of pumps and compressors
• Manufacture of bearings, gears, gear sets and drive mechanisms
• Manufacture of industrial furnaces, kiln and furnace ignitors
• Manufacture of hoisting and handling equipment
• Manufacture of other general purpose machinery
• Manufacture of agricultural and forestry machinery
• Manufacture of machine tools
• Manufacture of metallurgy machinery
• Manufacture of mining, quarry and construction machinery
• Manufacture of food, beverage and tobacco processing machinery
• Manufacture of machinery used in textile, garments and leather processing
• Manufacture of weaponry and ammunition (excluding hunting rifles and ammunition, components and accessories for hunting rifles)
• Manufacture of other specialty machinery
• Manufacture of not classified elsewhere (NCE) household appliances
• Manufacture of electrical motors, generators and transformers
• Manufacture of power distribution and control devices
• Lead-acid accumulators for starter-piston engines
• Nickel-cadmium, nickel-iron and other electrical accumulators
• Manufacture of not classified elsewhere (NCE) electrical equipment
• Manufacture of motorized land vehicles
• Manufacture of railroad and trolley engines and cars
• Manufacture of motorcycles
• Manufacture of vehicles for the disabled

3- Large-Scale Investment Incentives Scheme
12 investment subjects, which will potentially foster Turkey’s technology, R&D capacity and competitiveness, are supported by Large-Scale Investment Incentives Scheme instruments.

The terms and rates of support provided within the Large-Scale Investment Incentives Scheme are shown in the following table.

*OIZ: Organized Industrial Zones

The following categories of investment within the Regional and Large-Scale Investment Incentives Schemes can benefit from support granted to a one-grade lower region in terms of tax reduction and social security premium support (employer’s share).

• Investments in Organized Industrial Zones (OIZ)
• Joint investments to be made by at least five companies operating in the same sector with the purpose of greater integration

E.g.: A Region 3-level investment in an OIZ can take advantage of the tax reduction level in Region 4. Similarly, a Region 6-level investment may benefit from an additional 5% contribution to the investment.

4- Strategic Investment Incentives Scheme
Investments meeting the criteria below are supported within the framework of the Strategic Investment Incentives Scheme:

• The domestic production capacity for the product to be manufactured with the investment shall be less than the import of the product.
• The investment shall have a minimum investment amount of TRY 50 million.
• The investment shall create a minimum added-value of 40% (this condition is not applicable to refinery and petrochemicals investments).
• The total import value of the product to be manufactured with the investment shall be minimum of USD 50 million as of the past one year (excluding products that are not locally produced).

The terms and rates of support provided within the Strategic Investment Incentives Scheme are shown in the following table.

*Provided that it will not exceed 5 percent of the investment amount

Support Instruments
VAT Exemption:
VAT is exempt for imported and/or domestically delivered machinery and equipment within the scope of the investment incentive certificate.

Customs Duty Exemption:
Customs duty is exempt for imported machinery and equipment within the scope of the investment incentive certificate.

Tax Reduction:
The income or corporate tax is calculated on basis of reduced rates until the total amount of reduced tax reaches the amount of contribution to the investment. The rate of contribution to investment refers to the rate of the total fixed investment amount that is subject to tax reduction.

Social Security Premium Support (Employee’s Share):
For additional employment created by the investment, the employee’s share of the social security premium calculated on basis of the legal minimum wage will be covered by the government. The instrument is applicable only to investments made in Region 6 within the scope of the investment incentive certificate. There is no upper limit for Social Security Premium Support and it is applicable for 10 years.

Social Security Premium Support (Employer’s Share):
For additional employment created by the investment, the employer’s share of the social security premium calculated on basis of the legal minimum wage will be covered by the government.

Income Tax Withholding Allowance:
The income tax with regard to additional employment created by the investment, within the scope of the investment incentive certificate, will not be liable to withholding taxes. The instrument is applicable only to investments made in Region 6 within the scope of the investment incentive certificate. There is no upper limit for income tax withholding allowance and it is applicable for 10 years.

Interest Rate Support:
Interest rate support is a financial support instrument provided for investment loans with a term of at least one year obtained within the scope of an investment incentive certificate. A portion of the interest/profit share regarding the loan equivalent, at most 70 percent of the fixed investment amount registered in the investment incentive certificate, will be covered by the government.

Land Allocation:
Land may be allocated for investments, with an investment incentive certificate, in accordance with the rules and principles set by the Ministry of Finance, depending on the availability of such land.

VAT Refund:
VAT collected on construction expenses, made within the scope of strategic investments with a minimum fixed investment amount of TRY 500 million, will be rebated.

R&D Incentives
1. R&D Law
The R&D Law provides special incentives for R&D and design investment projects in Turkey provided that a minimum of 30 personnel are employed in an R&D center. This personnel requirement may be reduced to 15 employees in sectors determined by the Council of Ministers to be a priority, such as software, medicine and medical devices, agriculture, food, biotechnology, ICT, and other high-tech sectors. The incentives within the new law will remain in effect until 2024 and include:

• 100 percent deduction of R&D expenditure from the tax base
• Half of the R&D and design expenditure increase incurred in the operational year compared to the previous year will be deductible (criteria will be determined by Council of Ministers)
• Income withholding tax exemption for employees (until December 31, 2023.)
• 50 percent social security premium exemption for employers (until December 31, 2023)
• Stamp duty exemption for applicable documents
• Customs duty exemption for imported products within the scope of R&D projects
• Techno-initiative capital for new scientists up to TRY 500,000
• Deduction from the tax base of certain funds granted by public bodies and international organizations

2- Support for Technology Development Zones
The advantages in Technology Development Zones are:

• Profits derived from software development, R&D, and design activities are exempt from income and corporate taxes until December 31, 2023.
• Sales of application software produced exclusively in TDZs are exempt from VAT until December 31, 2023. Examples include software for systems management, data management, business applications, and different business sectors, the internet, mobile phones, and military command control.
• Wages of R&D, design, and support personnel employed in the zone are exempt from all taxes until December 31, 2023. The number of the support personnel covered by the exemption shall not exceed 10 percent of the number of the R&D personnel.
• Investments for the production of the technological products obtained as a result of the R&D projects conducted in the zone may be made in the TDZ if deemed suitable by the operator company and allowed by the Ministry.
• 50 percent of the employer’s share of the social security premium will be paid by the government until December 31, 2023.
• Customs duty exemption for imported products and stamp duty exemption for applicable documents within the scope of R&D, design, and software development projects.

3- Industrial Thesis (SANTEZ) Program
Direct financial support for new technology adaptation, process development, quality improvement, and environmental modification projects to be achieved via university partnerships:

• Up to 85 percent of the project budget could be supported by direct grants
• Project term is 2 years, with a possible extension of 6 months
• Expenditure on staff, travel, consumable materials, machinery equipment, consultancy, and relevant service procurements, transportation, insurance, and customs are supported
• The application file could be approved within 4 months, and the project supervision committee is independent

4- TUBITAK Support
TUBITAK (Scientific and Technological Research Council of Turkey) compensates or grants R&D related expenses and capital loans for R&D projects.
Projects eligible for TUBITAK incentives:

• Concept development
• Technological research and technical feasibility research
• Laboratory studies in the translation of a concept into a design
• Design and sketching studies
• Prototype production
• Construction of pilot facilities
• Test production
• Patent and license studies
• Activities concerning the removal of post-sale problems arising from product design

TUBITAK 1515 – Frontier R&D Laboratory Support Program:
The 1515 Program applies an integrated perspective that extends beyond a consideration of the initial establishment phase of the R&D laboratory. The 1515 Program offers an entirely grant-based financial model to cover up to 75 percent of the operating expenses of the R&D laboratory in Turkey up to TRY 10 million for each calendar year for duration of 10 years at most.

The coverage of the grant support consists of the following items:

• Personnel costs
• General operating costs
• Consultancy fees

For eligibility to have personnel costs covered in the total grant amount, at least 50 percent of the personnel must hold Turkish citizenship and at least 1/3 should have a doctoral degree.

5- TTGV Loans
The Technology Development Foundation of Turkey (TTGV) offers long-term interest-free loans for R&D projects on agriculture technologies, health technologies, education technologies, and energy efficiency improvement.

The loans are intended to provide financial support to those activities whose purpose is the development of new products with commercial value in the aforementioned technological areas, or for the promotion of competitiveness of current products in these areas.

The scope of the program includes:

• The duration of project support is at least 1 year and is at most 3 years.
• The upper and lower limits for the amount of support to be provided are USD 3 million and USD 250,000, respectively.
• Support shall be provided 50 percent by TTGV and 50 percent by the project coordinating company’s contribution.
• The pay-back term is 4 years in total after project execution, including a one-year grace period.

Export Support
Inward Processing Regime
The aim of the Inward Processing Regime is to enable exporters to procure inputs at world market prices for the production of their exports without being subject to customs duties, including VAT, as well as trade policy measures.

The Inward Processing Regime includes two types of processing measures:

• Conditional Exemption System and
• Reimbursement System.

1.The Conditional Exemption System waives commercial policy measures and taxes that arise during the importation of non-freely circulating raw materials, auxiliary materials, packages, and operating equipment used in production of the export product subject to Inward Processing Regime. It is called conditional as the exporter has to guarantee through collateralization of the imported materials and equipment that they will only be used for the production and exportation of the product subject to Inward Processing Regime. The guarantee given for the collateralized materials and equipment will be released upon exporting of the final product.
2.The Reimbursement System is the reimbursement of taxes that were paid during the importation of freely circulating raw materials, auxiliary materials, packages, and operating equipment used for the production of the exported product subject to Inward Processing Regime. These taxes are reimbursed upon the exporting of the final product subject to Inward Processing Regime. Commercial policy measures are applied to the imported materials and equipment and all the import procedures such as technical regulations in foreign trade and standardization legislation must have been completed.

Evaluation of Applications

• It should be possible to determine whether the imported raw materials are used to produce exported products.
• The activity should not have a negative impact on the economic interests of the producers in the customs territory.
• Activities should create added-value and the final product should not have a negative impact of the competitiveness in the sector.
• The company should be built in the customs territory in Turkey.

Benefits of Inward Processing Regime

• 100 percent Customs Duty Refund
• 100 percent  VAT Refund
• 100 percent Special Consumption Tax Refund
• 100 percent Resource Utilization Support Fund Refund
• 100 percent Stamp Tax Refund
• Exemption from quotas and surveillance measures: There are import quotas determined by the government for a number of goods, and Inward Processing Regime certificate holders will not be affected by these quotas. The government also determines market prices for some products and imposes excise taxes to these products based on the determined market price, irrespective of the price paid by the importer. Participants in the Inward Processing Regime would also be exempt from such surveillance measures.
• It is permitted for domestic sales and delivery

Sectoral Incentives
Incentives for Renewable Energy
In addition to the General, Regional, Priority, and Strategic Investment Incentive schemes that apply to investments in the energy sector, the government provides specific incentives for electricity production investments that are based on renewable energy sources.

• 100 percent exemption from Customs Duty and VAT
• Feed-in-Tariff (FiT) scheme for 10 yearsa.Differentiated FiT scheme based on resource type
  b.Extra premiums for domestic components

• Grid connection priorities
• Lower license feesa.Only 1 percent of licensing fee
  b.Exemption from the annual license fee for the first eight years of operation

• License exemptions in exceptional circumstances
• Various practical conveniences in project preparation and land acquisition

 Date: 13 March 2017

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