./.RESTRICTEDWORLD TRADE
ORGANIZATIONG/SCM/Q2/TUR/16
20 March 2002
(02-1456)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the EUROPEAN COMMUNITIES1
Regarding the New and Full Notification of TURKEY2
The following communication, dated 18 March 2002, has been received from the Permanent
Mission of Turkey.
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Q1. On page 5 of the notification, it is stated under the sub-heading "Definitions,
descriptions of encouragement measures" that there is an exemption from "fund levies"
Please define the term ‘fund levies’.
Reply
Investment project proposals, which are evaluated in accordance with rules set forth by the
"Decree Concerning State Encouragement to Investments and the Investment Encouragement Fund"and found eligible by the Undersecretariat of Treasury, are issued an investment encouragement
certificate.  Imports of the machinery and equipment to be used in the physical plant in connection
with an investment encouragement certificate sh all be subject to exemption from customs duty and
fund levies to be collected in line with the cu rrent "Import Regime Decree".  Once the exemption is
listed on the "Certificate" the investor can import the machinery and equipment indicated on theapproved list, namely the "Global List" aiming only at the purposes of the investment in question free
of customs duties and fund levies.
The term "fund levies" in the notification document designated as G/SCM/N/71/TUR
corresponds to "Mass Housing Fund levies".
With regard to the provisions of the "Law for Regulation of the Foreign Trade" No. 2976,
dated 1.1.1984, the current "Import Regime Decree " (Decree No. 95/7606) was published in the
Official Gazette (No. 22510, dated 31.12.1995).  The Decree has the purpose of regulating the
principles in the implementation of the import policies provided to different public authorities withseveral legislation and execution of the import within the framework of policy, targets and principles
foreseen in the Development Plans and Annual Programmes and in line with the international
agreements.
                                                     
1 G/SCM/Q2/TUR/15
2 G/SCM/N/71/TURG/SCM/Q2/TUR/16
Page 2
Goods listed in the Annexes III and IV to the "Import Regime Decree (No. 95/7606)" are
subject to "Mass Housing Fund levies" in addition to the customs duties during the import.  Goods
included in the Annexes III and IV are "processe d agricultural products and fishery products".
"Mass Housing Fund levies" collected for the goods listed in Annexes III and IV are
differentiated in accordance with preferential trade agreements signed with the third countries.
According to the Article 4 of the Community Council Decision 1/95 establishing a Customs
Union between Turkey and the European Union, all customs duties and charges having equivalent
effect must be nullified for the "industrial goods" in the bilateral trade.  On the other hand "Mass
Housing Fund levies" are collected from the fishery products and processed agricultural products
remaining outside of the scope of the Customs Union during the import of these goods from theEuropean Union.
In the above paragraphs, it has been mentioned that the "Mass Housing Fund levies" are
collected from the "fishery products" and "processed agricultural products" enlisted in the Annexes III
and IV.  Since the measure in question is an exemption from customs duties and fund levies for theimports of machinery and equipment (capital goods related to the investment), fund levies or
exemptions of them has no effect in practice.
Q2. Can Turkey please indicate  whether the following programm es were in force during the
reporting period?
(a) 'General' tax deduction on export & export tax rebate on certain products
(Art 8 of Corporation Tax Law as amended by Law No. 2362)
(Law No. 261 of July 1963 , Decree No. 7/10624 of Sept 1975)
Reply
We understand from the question raised by the EU is in fact "The Corporate Tax Exemption".
This system was introduced by Law No. 5422, amended in 1981 by Law No. 2573, in 1988 by Law
No. 3482, abolished in 1993 by Law No. 3946 and published in the Official Gazette dated
30 December 1993.
We also notified this information to the WTO-Committee on Subsidies and Countervailing
Measures, which took place in the document da ted 4 April 1997, numbered G/SCM/Q2/TUR/6, as an
answer to the United States regarding our subsidy notification in 1995.
Any other programme about tax deduction on export and export tax rebate on certain products
does not exist.
(b) ‘direct’ freight rebate & transport volume aid measures
(Decree No. 93/43 Oct. 1993)
If yes, please provide information on them in the agreed format.
Reply
Such a programme does not exist.
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