Details of the supports on project-based innovative, R&D focused and high value-added product investments announced by a cabinet decree issued in Official Gazette No. 29900, dated 26 November 2016. Law No. 6745, article 80 has been authorized council of ministers to decide and implement such supports and incentives.
Eligible investments will be granted following support or supports which are found appropriate in the framework of the decree;
- Customs duty exemption
- Value Added Tax exception
- Value Added Tax refund
- Tax reduction or exemption or tax exception
- Reduction in employer’s share of social security premium contribution
- Support on Income tax withholding
- Support for qualified employees
- Interest and grant support
- Capital contribution
- Energy support
- Public procurement guarantee
- Land allocation for investments
- Infrastructure support
- Exemption from the restrictions related to allocation, permits licenses and suchlike.
Application and Assessment
- Ministry of economy may invite one or more companies or issue general calls to make innovative, R&D focused and high value-added product investments.
- Projects will be assessed according to criteria determined by the Decree. The investments should be;
- Meeting the country’s current or future critical needs
- Satisfying supply security of the goods whose supply capacity is inadequate in the country
- Increasing the technological capacity in the fields technological gap exist
- Reducing the dependency on import in the fields foreign trade deficit exist
- Providing high added value
- Ensuring production by using new generation technology country doesn’t have
- Increasing country’s competitive capacity
- Innovative and R&D based
- Also, in order to be taken into assessment the investment value of project should be at least 100 million $.
Investment Incentive Certificate
The projects that are found appropriate will be presented to council of ministers, who will issue “Decision of Support” for such projects. Also, Ministry of Economy will issue “investment incentive certificates” for eligible investments.
Commencement and end date of investment will be determined in the Decision of Support, and as rule investor should complete the project within the prescribed period including the additional time.
Investment completion visa is realized after the expertize process.
Transfer of Investment
Transfer of investment is subject to Ministry’s permission and PM’s approval. In case of transfer, the new investor will benefit from remaining parts of the supports and exemptions.
Investor may also transfer its stocks in Istanbul Stock Exchange by the permission of Ministry of Economy.
Implementation of the Supports
Some significant points for the following supports are:
- Interest: It is the bank’s responsibility to notify the Ministry as regard to use of the loans for investments and the correct interest rates on the date of maturity.
- Grant: Investor eligible for grant support will submit their fixed investment expenditures certified by certified public accountant (cpa) report to the Ministry.
- Energy: In the calculation of the energy cost of ınvestor; back debts, default interest, fines, and prepaid invoice values of energy supplying institutions and organizations will be taken into account.
- Qualified personnel: Wage support to be provided will depend on the number of the qualified employees and their gross wages. This support starts in the month following the date of investment completion visa, and SSI records will be taken as a base.
- Public procurement guarantee: The support will be implemented by the institutions and organizations specified in the “Decision of Support”.
- Infrastructure: institutions and organizations responsible for construction of Infrastructure will implement this support for the eligible investments with priority.
- Customs duty exemption: Custom duty exemption and Value Added Tax exception in the import of machinery and equipment will be implemented by Ministry of Customs and Trade
- SSI premium: Reduction in employer’s share of social security premium contribution will be implemented by SSI.
- Land allocation: This support will be applied in line with the principles and procedures determined by ministry of finance.