Turkey s Project-Based Incentive Scheme
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1 Turkey s Prject-Based Incentive Scheme December 4th, 2017
2 Executive Summary Turkey has intrduced a new system n September 26, 2016, which grants gvernment incentives fr eligible investments n prject basis. Prject-Based Incentive Scheme, als referred as super incentive, was designed t prvide gvernment incentives t the qualified prjects with a minimum fixed investment value f USD $100 millin. The scheme is executed by the Ministry f Ecnmy. Based n each prject s qualificatin, the Ministry ffers relevant and distinctive incentives. Stratejic. Public Affairs & Gvernment Relatins practice can help yu psitin yur investment in Turkey and deliver the right messages t the decisin-makers. Scpe Turkey s Prject-Based Incentive Scheme With the aim f attracting investrs and enhancing investments made in Turkey, Turkish Parliament intrduced Law N The Law n Supprting Investments n a Prject Basis and Amending Certain Laws and Decree Laws n September 7, The law grants authrity t the Cuncil f Ministry t supply incentives and supprt t the eligible investments. Fllwing Law N.6745, The Cuncil f Ministers Decree N. 2016/9495 Granting Prject-Based Gvernment Supprt fr the Investment Decisin was prmulgated n September 26, The Decree was published as clarificatin f the law, specifying framewrk f the requirements. Under Prject-Based Incentive Scheme, Ministry f Ecnmy ffers exclusive incentives cnsidering the requirements f each investment. The extent f the incentives is nt determined by the lcatin r by the sectr, which prvides the pssibility f treating the investments equally. Ministry f Ecnmy s budget will be used t prvide financial supprt t the eligible prjects.
3 Objectives & Cntent The system was put int frce by the Ministry f Ecnmy in rder t meet the ptential critical needs f the cuntry, prvide supply security, reduce external dependency, implement the technlgical transfrm f the cuntry, t supprt innvative, R&D intensive and high-added value investments n a prject basis. FDI Inflw t Turkey (USD billin) Incentives Surce: Central Bank f the Republic Turkey Tax-related incentives: Custms tax exemptin VAT exemptin VAT refund Tax reductin r exemptin n crprate taxes Incme tax withhlding supprt Emplyee-related incentives: Emplyee scial security premium supprt Qualified emplyee supprt Finance-related incentives: Interest supprt/ grant supprt Capital cntributin Public prcurement guarantee Other incentives: Energy supprt Land allcatin Infrastructure supprt Facilitated arrangements regarding permissin, license, registratin etc.
4 Applicatin & Required Dcuments The Ministry f Ecnmy may invite cmpany r cmpanies in rder t invest in the prject-based investment in accrdance with the specified purpse, r make an annuncement call. Regarding the invitatin r the annuncement call, the investrs must apply t the Ministry with the required dcuments t benefit frm the incentives. Infrmatin f investr and prject, investment feasibility, impact analysis, requested incentives with reasns, (fr mre: see Annex-1 f Decree N. 2016/9495), signed etter f applicatin and ther related dcuments are required. The Ministry may request additinal infrmatin r dcuments which aren t specified in the decree. Evaluatin & Implementatin In rder fr investment prjects t be evaluated under this system; they must have a minimum fixed investment value f US $100 millin. Other requirements: Being able t meet the critical needs f the cuntry, Prviding supply security, Imprving technlgical capacity, Reducing imprt dependency, Having high-added value, Ensuring prductin using new technlgies, Accelerating technlgical transfrmatin and creating psitive externality, Bringing cmpetitiveness in varius sectrs, Being R&D intensive and innvative, Cncerning the prductin f high-added value manufactured gds, Cncerning integrated prductin. Ministry f Ecnmy will present the eligible investment prjects t the Cuncil f Ministers. In case f further apprval; Supprt Decisin will be issued by the Cuncil f Ministers cnfirming the start and end date f the investment..
5 The investment must be cmpleted within the time perid stated in Supprt Decisin. If the investr fails t fulfil the cnditins f the Supprt Decisin, taxes that haven t been cllected in due time due t the discunted crprate tax, tax exemptin and incme tax withhlding supprt will be cllected under The Law n Cllectin Prcedure f Public Assets. Investment expenditures which benefits frm the gvernment incentives under this system cannt benefit frm ther incentives that are prvided by ther public institutin and rganisatin. Hw can StratejiC. Help Yu? As a leading public and crprate affairs cnsultancy in Turkey and in the brader regin since 1987, we ffer strategic guidance, trust-based relatinships, and actinable intelligence t ensure that businesses thrive even under the mst challenging situatins. We wrk as yur trusted advisr and supprt yu against any bstacle r challenge the wrld thrws at yu. Our Public Affairs & Gvernment Relatins practice can help yu engage the decisin-makers and deliver the right messages. Fr further infrmatin: - The Cuncil f Ministers Decree N. 2016/9495 Granting Prject-Based Gvernment Supprt fr the Investment Decisin (available in Turkish) - Law N.6745 The Law n Supprting Investments n Prject Basis and Amending Certain Laws and Decree Laws (available in Turkish)
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