What are the incentives in Turkey?

The new investment incentives scheme is specifically designed to encourage investments with the potential to reduce dependency on the importation of intermediate goods vital to the country’s strategic sectors. Effective as of January 1, 2012, the new investment incentives system has been comprised of four different schemes.

There are several incentives depending on the region, volume or type of the investment;

1. VAT exemption,
2. Customs duty exemption,
3. Tax reduction,
4. Social security premium support,
5. Income tax withholding allowance,
6. Interest rate support,
7. Land allocation,
8. VAT refund

Companies which are conducting R&D activities may benefit from several incentives.

Turkey’s investment legislation is simple and complies with international standards, while it offers equal treatment for all investors.  A Customs Union Agreement between Turkey and the European Union has been in effect since 1996. The agreement allows trade between Turkey and the EU countries without any customs restrictions.  

​​​​​​​​​​​​​​​The Turkish government has set the target of increasing the share of R&D investments within the overall public budget to 2%. As of 2018, this figure has already increased above 1 percent – with the expectation to reach 2 percent over the next several years.