Investment Incentive System

Transcription

1 Investment Incentive System Tax Services KPMG Turkey kpmg.com.tr kpmgvergi.com

2 Supports provided within the scope of decree no. 2012/3305 on state incentives in investments Through the amendment issued in 2016, the start-up periods for investments have been abolished and state incentives were made permanent irrespective of the duration. General Incentives al Investments Primary Investments s s Customs Duty Exemption VAT Exemption Contribution to Investment Rate 6 15% 25% 30% 40% 50% 40%* 50% Tax Reduction Rate 50% 55% 60% 70% 80% 90% 80% 90% Tax Support Rate during the investment/operation phase 100% 90% 80% /80% 70% 50% 50% SSI Employer Support SSI Empl. Supp. Limit (Investment Amount x %) Shipyard, ship building investments (18 months) 2 Years 3 Years 5 Years 6 Years 7 Years 10 Years 7 Years 10 Years Interest Support (TL/FE) 3 / 1 4 / 1 5 / 2 7 / 2 5 / 2 7 / 2 Int. Supp. Upper Limit (TL) Investment Land Allocation Income Tax Withholding Support 10 Years 10 Years 10 Years SSI Employee Support 10 Years 10 Years *For primary investments with fixed investment amounts equal to TRY 1 Billion and above, the Contribution to Investment Rate is 50%. s Provinces and districts designated within the scope of regional classification Ankara, Antalya, Bursa, Eskişehir, İstanbul, İzmir, Kocaeli, Muğla Adana, Aydın, Bolu, Çanakkale (Gökçeada, Bozcaada hariç), Denizli, Edirne, Isparta, Kayseri, Kırklareli, Konya, Sakarya, Tekirdağ, Yalova Balıkesir, Bilecik, Burdur, Gaziantep, Karabük, Karaman, Manisa, Mersin, Samsun, Trabzon, Uşak, Zonguldak Afyonkarahisar, Amasya, Artvin, Bartın, Çorum, Düzce, Elazığ, Erzincan, Hatay, Kastamonu, Kırıkkale, Kırşehir, Kütahya, Malatya, Nevşehir, Rize, Sivas Adıyaman, Aksaray, Bayburt, Çankırı, Erzurum, Giresun, Gümüşhane, Kahramanmaraş, Kilis, Niğde, Ordu, Osmaniye, Sinop, Tokat, Tunceli, Yozgat Ağrı, Ardahan, Batman, Bingöl, Bitlis, Diyarbakır, Hakkari, Iğdır, Kars, Mardin, Muş, Siirt, Şanlıurfa, Şırnak, Van, Gökçeada*, Bozcaada* Investments to be realized in Bozcaada and Gökçeada are subject to industry s. General and al Investment Amounts According to the General Incentive System, the minimum investment amount is TRY 1 million for the regions I and II and TRY 500 thousand for the regions III, IV, V, VI The minimum fixed investment amount according to the regional incentive regime has been determined separately depending on the investment type in Decree Appendix 2. In Decree Appendix 4, investments which cannot benefit from incentives or investments which can only be supported depending on certain criteria have been listed

3 Investments to benefit from sub-region support Investments to be realized in Organized Industrial Zones (OIZ) or in industrial zones (manufacturing industry oriented). Investments which are realized by an investor who has at least five persons or legal entities as partners in the same sector and will provide integration to the field of common activity Investments To Benefit From Sub- Support (al) Investments To Benefit From Sub- Support (Large-Scale) Customs Duty Exemption VAT Exemption Contribution to Investment Rate 25% 30% 40% 50% 55% 30% 35% 40% 50% 60% 65% Tax Reduction Rate 55% 60% 70% 80% 90% 90% 55% 60% 70% 80% 90% 90% Tax Support Rate during the investment/operation phase 90% 80% 70% 50% 90% 80% 70% 50% SSI Employer Support 3 Years 5 Years 6 Years 7 Years 10 Years 12 Years 3 Years 5 Years 6 Years 7 Years 10 Years 12 Years SSI Empl. Supp. Limit (Investment Amount x %) Interest Support (TL/FE) 3 / 1 4 / 1 5 / 2 7 / 2 Int. Supp. Upper Limit (TL) Investment Land Allocation Income Tax Withholding Support 10 Years 10 Years SSI Employee Support 10 Years 10 Years

4 Primary Investments Primary Investments may benefit from regional supports in 5. If these investments are located in 6, however, they are subject to the regional supports provided in the region they are located. (Amendments made by Cabinet Decrees 2013/4288, 2014/6058, 2014/6588, 2015/8216 and 2016/8715 and by Decree 2015/7497 have also been included.) Investments for cargo and/or passenger transportation by seaway Railway investments of the private sector for intercity cargo and/or passenger transportation and railway investments for urban cargo transportation Tourism accommodation investments to be realized in the Culture and Tourism Protection and Development s and eligible for regional supports for thermal tourism. International fair investments which have minimum 50 thousand m2 indoor space (excluding accommodation and shopping center units) Investments in the fields of defense, aviation and space which are to be realized after the project approval of the Ministry of Defense Nursery, day care center, preschool, primary, secondary and high school education investments to be realized by private sector Test centers, wind tunnels and similar investments (automotive, space and defense industry) Investments regarding the manufacturing of products and parts that are developed as a result of R&D projects supported by the Ministry of Science, Industry and Technology, TÜBİTAK and KOSGEB. Mine extraction investments and/or processing investments (excluding group I minerals as stated in the Mining Law dated 4/6/1985 and crushed stones and extraction and/ or processing investments in Istanbul) Main industry investments in the motor vehicle industry amounting at least TRY 300 Million; investment in engines amounting at least TRY 75 million; investments in engine parts, transmission components and their parts, as well as investments related to automotive electronics amounting at least TRY 20 million. Electricity Generation Investments where metals which have a valid mining license and permit issued by the Ministry of Energy and Natural Resources under the Mining Act. 2 of 3213 Article 4-b group are used as an input. Regarding the project approval by the Ministry of Energy and Natural Resources, investments having minimum 500 TPE (tonne petroleum equivalent) energy consumption per year, investments to be realized in existing manufacturing industrial plants, investments saving at least energy per product and investments, the return period of which are 5 years at maximum, excluding Investments which are not incentivized in Appendix 4. Investments aimed at producing electricity through recycling waste heat, excluding natural gas based electricity production facilities Liquefied natural gas (LNG) and natural gas storage investments which cost TRY 50 million at minimum. Investments in carbon fiber manufacturing or composites manufacturing provided that they are joined together with carbon fiber manufacturing. Investments for products classified under technology intensive industries in accordance with the Organization for Economic Co-operation and Development s (OECD) definition of technology intensive, (US-97 Code: 2423, 30, 32, 33 and 353) Investments for mineral exploration to be carried out in licensed fields by investors who have a mining permit regulated in accordance with the Mining Law. Investments for manufacturing turbines and power plants aimed at managing renewable energy and wind turbines used in the production of wind energy. Integrated investments for producing aluminium flat products via direct chill slab casting

5 Strategic investment criteria Investments for which the minimum fixed investment amount is TRY 50 million The total import amount of the subject product to be invested in is above USD 50 million within the last year. (This provision article does not apply to products which are not produced domestically) The added value to be provided by the investment contained in the certificate is minimum 40%. (This provision article does not apply to investments in the refinery and petrochemicals industries) The total domestic production capacity for the product subject to the investment is less than imports. For strategic investments, the Added-Value is calculated as below: (Sales price of the product-input Cost)* 100 Input Cost Prioritized investments for which the minimum fixed investment amount is above TRY 3 billion will be specified as Strategic Investments. However, the interest support amount will be limited to 700,000 Turkish Liras. Strategic Investments s Customs Duty Exemption VAT Exemption Contribution to Investment Rate 50% 50% Tax Reduction Rate 90% 90% Tax Support Rate during the investment/operation phase 50% SSI Employer Support 7 Years 10 Years SSI Empl. Supp. Limit (Investment Amount x %) 15 Interest Support (TL/FE) 5 / 2 Int. Supp. Upper Limit (TL) TRY 50 M provided that it does not exceed 5% of the investment amount Investment Land Allocation VAT Refund Income Tax Withholding Support SSI Employee Support Construction expenses in investments amounting to TRY 500 M and above 10 Years 10 Years

6 Large Scaled Investments Number Investment Subjects Amounts (TRY Million) 1 Refined Petroleum Products Manufacturing Chemicals and Chemical Products Manufacturing Ports and Port Services Investments and Airport Investments Motor Vehicle Manufacturing Investments Motor Vehicle Main Industry Investments a) Motor Vehicle Sub-Industry Investments 5 Railway and Tramway Locomotives and/or Rail Car Manufacturing Investments 6 Transport Services Investments with Transit Pipeline 7 Electronics Industry Investments 8 Medical Instrument, Precision and Optical Instruments Manufacturing Investments 9 Medicine Production Investments 10 Air and Space vehicles and/or Parts Manufacturing Investments 11 Machine (Electrical machinery and equipment included) Manufacturing Investment 12 Metal production investments (IV/c Group Metallic Ore s and / or concentrate s investments for the production of the final metal stated in the Mining Law)

7 How Can KPMG Help You Within the Scope of Incentive Regulations? Consultancy services on the correlation between the planned investment and the Incentive system. Consultancy services during the incentives application process Investment process management/consultancy Completion of investments and closure of incentive documents

8 Contacts: KPMG Yeminli Mali Müşavirlik A.Ş. Emrah Akın, YMM Tax, Partner T : E : eakin@kpmg.com İstanbul İş Kuleleri Kule 3 Kat Levent İstanbul T : Ankara The Paragon İş Merkezi Kızılırmak Mah. Ufuk Üniversitesi Cad Sok. :2 Kat:13 Çukurambar Ankara / Türkiye T: İzmir Heris Tower, Akdeniz Mah. Şehit Fethi Bey Cad. :55 Kat:21 Alsancak İzmir / Türkiye T: kpmg.com.tr kpmgvergi.com The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. one should act on such information without appropriate professional advice after a thorough examination of the particular situation KPMG Yeminli Mali Müşavirlik A.Ş., a Turkish corporation and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved. Printed in Turkey. KPMG brand and KPMG logo are registered trademarks of KPMG International Cooperative.