G/SCM/N/253/TUR/Suppl.2  
 
14 January 2015  
(15-0248)  Page: 1/4  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF THE 
GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON 
SUBSIDIES AND COUNTERVAILING MEASURES 
TURKEY 
Supplement 
The following notification, dated 26 December 2014, is being circulated at the request of the 
Delegation of Turkey.  
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 THE INVESTMENT INCENTIVE PROGRAM  
Turkey's new Investment Incentive Program became effective by the "Council of Minister's Decree 
No. 2012/3305 dated 15 June 2012. As in the previous Investment Incentive Programs, both domestic and foreign investors can benefit from the measures under equal terms and conditions 
and the measures offered under the Program are not directly related to trade.  
A. Legal Basis Investment incentives which are designed and implemented by the Ministry of Economy are based 
on the provisions of Board of Ministers Decrees and related Communiqués. 
The "Decree No: 2012/3305 on State Incentives for Investments"
1 has been adopted to replace the 
"Decree No: 2009/15199 on State Incentives for Investments".2  
The Communiqué No. 2012/1 defines procedures an d principles for the implementation of the 
Decree No: 2012/3305. 
B. Purpose The Decree aims to steer savings into high value added investments, to boost production and 
employment, to encourage large scale and strategic investments with high R&D content for 
increased international competitiveness, to increase foreign direct investments, to reduce regional development disparities and to promote investments for clustering and environment protection for the production and export-oriented growth stra tegy in line with the projected targets in 
Development Plans and Annual Programs as well as international agreements. 
                                               
1 Decree No: 2009/3305, dated 15 June 2012, published on the Official Gazette dated 19.06.2012 and 
No: 28328. 
2 Decree No: 2009/15199, dated 14 July 2009, published on the Official Gazette dated 16.07.2009 and 
No: 27290. G/SCM/N/253/TUR/Suppl.2 
 
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  C. Scope 
Investors apply to the Ministry of Economy with the related documents including investment 
feasibility studies and proposals. After the evaluati on to be made by the Ministry on the basis of 
macro-economic programs, supply vs. demand conditions and sectoral, financial and technical 
terms, eligible investment projects are granted an Investment Incentive Certificate which enables 
to benefit from the incentive measures enlisted on it.  
Investment activities related to the production of goods and services, research and development 
(R&D) and environmental protection can benefit from the incentive measures provided in 
consideration of the international commitments and regional and sectoral restrictions determined in the Decree.  
Investments are supported through 4 different incentive schemes and 9 different incentive 
measures designed within the scope of the new program. Contributions provided to investors 
through incentive measures depend on the characteristics of the investment and applicable schemes. The incentive schemes and related support measures are as following: 
I. General Investment Incentive Scheme 
 
i. Customs duty exemption 
ii. VAT exemption 
iii. Income Tax Withholding Support (Only for Region 6) 
 II. Regional Investment Incentive Scheme 
 
i. Customs duty exemption 
ii. VAT exemption 
iii. Tax deduction 
iv. Social security premium support - Employer's share 
v. Interest support (For Region 3,4,5 and 6) 
vi. Land allocation 
vii. Social security premium support -Employee's share (Only for Region 6) 
viii. Income Tax Withholding Support (Only for Region 6) 
 
III. Large Scale Investment Incentive Scheme 
 
i. Customs duty exemption 
ii. VAT exemption 
iii. Tax deduction 
iv. Social security premium support - Employer's share 
v. Land allocation 
vi. Social security premium support -Employee's share (Only for Region 6) 
vii. Income Tax Withholding Support (Only for Region 6) 
 
IV. Strategic Investment Incentive Scheme 
 
i. Customs duty exemption 
ii. VAT exemption 
iii. Tax deduction 
iv. Social security premium support - Employer's share 
v. Interest support (For Region 3,4,5 and 6) 
vi. Land allocation 
vii. VAT Refund 
viii. Social security premium support -Employee's share (Only for Region 6) 
ix. Income Tax Withholding Support (Only for Region 6) 
Regional Investment Incentive Scheme aims to eliminate inter-regional imbalances by supporting 
the industries through incentives in each province based on the competitive potential and 
economic scale of that specific province. The Large Scale Investment Incentive Scheme supports 
investment projects of different sizes in 12 industries/fields with a minimum fixed investment amount of 50 million TL through incentive measures changing according to regions. The Strategic G/SCM/N/253/TUR/Suppl.2 
 
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  Investment Incentive Scheme supports investment projects in all provinces of Turkey regardless of 
the region to increase the manufacturing of products with high import dependency. 
Investment subjects not incentivized by the Regional, Large Scale or Strategic Schemes can 
benefit from supports granted by the General Investment Incentive Scheme. Some of the 
investment subjects are not supported or conditionally supported by the program because of 
international agreements or surplus capacity.  
D. Regional Classification  
Regional and Large Scale Investment Incentive Schemes of the new program provide support to 
investments in different provinces at varying rate s and terms according to regional and provincial 
development levels.  
Within the scope of the new Investment Incentive Program, all provinces in Turkey have been 
grouped into 6 regions according to the level of economic and social development as indicated by 
the 2011 socio-economic development index of the Ministry of Development. Investment Incentive 
Schemes based on regional development level offer the most advantageous rates and terms to 
Region 6 and less advantageous ones to Region 5, 4, 3, 2 and 1 respectively.  
E. Application Procedure Submission of following documents is required for application to the Ministry of Economy for the 
issuance of incentive certificate: 
 
a. Circular of signature of the persons authorized to represent and bind the company to 
realize investment project, 
b. Turkish Commercial Registration Gazette or Turkish Tradesmen and Craftsmen 
Registration Gazette documenting the current status of the company, 
c. Investment application form and its annexes containing information in accordance with 
the format provided in the Communiqué published pursuant to the Decree, 
d. Original copy of the receipt indicating deposit of the amount mentioned in the Decree to 
the account of the accounting unit, 
e. Original of the letter to be received from th e related departments of the Social Security 
Institution confirming that the company has no premium debt and administrative fine due or it has been deferred, credited or re-structured pursuant to Social Insurance and General Health Insurance Law No. 5510 and the restructuring is still valid, 
f. For the investments indicated in the lists annexed to Environmental Impact Assessment 
(EIA) Regulation published pursuant to Envi ronment Law No 2872, EIA Report indicating 
affirmation of the investment in terms of its environmental impact or the document 
indicating that EIA Report is not necessary. 
The Ministry of Economy is authorized to request additional information and comments, 
permission, license and other documents received from the public authorities and institutions 
depending on the subject of investment if deemed necessary. 
 F. Incentives Measures  
a. Exemption from Customs Duties  
For the investment projects which are granted Investment Incentives Certificate by the Ministry of 
Economy, imports of the machinery and equipment to  be used in the production process shall be 
subject to Customs Duty exemption. G/SCM/N/253/TUR/Suppl.2 
 
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  b. Value Added Tax Exemption  
Pursuant to the Law No: 3065 and date: 25/10/1984, imports and domestic purchases of 
machinery and equipment within the scope of the investment Incentives certificate are exempted 
from the Value Added Tax. 
c. Tax Deduction 
Reduced income or corporate tax rates will be imposed on the investor's income under the 
incentive scheme according to the characteristic of the investment until the amount calculated on 
the basis of government's contribution rate, dete rmined by the same scheme and corresponding to 
a certain percentage of the fixed investment amount is reached. 
The contribution rate to investment refers to the rate of the fixed investment subject to tax 
deduction, whereas tax deduction refers to the rate of income or corporate tax to be reduced until 
the contribution rate is reached. 
d. Interest Support 
This support will be available for investment loans, borrowed to finance the investment, with a 
maturity of at least one year for Regional Investments (Region 3, 4, 5 and 6), Strategic 
Investments, R&D and Environment Investments. The Ministry will cover a specific portion of the interest/profit share of the loans that do not exceed 70% of the fixed investment amount 
registered on the certificate for a specific period which would not exceed 5 years.  
e. Social Security Premium Support (Employer's Share) 
For any additional employment created by an investment with an incentive certificate under 
Regional, Large Scale and Strategic Investment Incentive Schemes, the amount corresponding to 
the employer's share of the social security prem ium on legal minimum wage, paid by the investor, 
is covered by the Ministry. In order for an investor to benefit from this support, the project should be concluded and a completion visa should be granted. 
f. Land allocation 
Government land will be allocated for rent for investments with incentive certificate under large 
scale, strategic and regional incentive schemes in accordance with the rules and principles defined 
by the Ministry of Finance, depending on the availability of such land in the provinces where 
investments are made.  
g. VAT Refund 
VAT collected on the building & construction expenses made for Strategic Investments will be 
rebated provided that the fixed investment amount is over 500 million TL. 
h. Social security premium support -Employee's share (Only for Region 6) 
The employee's share of the social security premiu m paid by the investor to the Social Security 
Institution in the amount corresponding to the legal minimum wage, for additional personnel 
recruited for the investments in Region 6 is covered for 10 years. 
i. Income Tax Withholding Support (Only for Region 6) 
The withholding tax imposed on the income tax of employees will not be levied for new staff 
employed for the investments made in Region 6 for 10 years. 
 
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