Government Incentives in Investments – General Incentives
5TH REGION INCENTIVES FOR INVESTMENTS ON ENERGY EFFICIENCY
The Resolution of the Council of Ministers numbered: 2014/6058 that took effect upon publication in the Official Gazette dated: 9 May 2014 and numbered: 28995, resolved to incent some energy investments.
The Energy Investments to be Incented:
- Investments on energy efficiency to be realized in existent production industry plants with annual energy consumptions of minimally 500 TEP (petroleum equivalent in tons), that provide a minimum energy saving of 20% per unit and with maximum recycling times of 5 years.
- Investments based on electricity production by the recycling of waste heat in a plant (excluding electricity production plants based on natural gas) .
- This resolution will also benefit the liquefied natural gas (LNG) investments as well as subterranean natural gas storage investments with minimum amounts of 50 Million TL; and
Regardless of the region of investment, the AFORESAID SHALL BENEFIT FROM THE INCENTIVES PROVIDED TO THE 5TH REGION.
The 5th Region Incentives to be Benefited From:
- Value Added Tax Exception,
- Exemption from Customs Tax,
- Tax Rebate,
- Insurance premium employer share support,
- Interest Support,
- Allocation of an investment place,
Value Added Tax Exception:
Value added tax will not be paid for investment commodities, machinery & equipment that will be obtained domestically or from abroad within the scope of the incentive certificate.
Exemption from Customs Tax:
Customs tax will not be paid for investment commodities, machinery & equipment that will be obtained from abroad within the scope of the incentive certificate.
Application of the income or the corporate tax with discount until it reaches the contribution amount envisaged for the investment (the contribution amount to investment for the 5th Region is 30%; the rebate ratio for the income or the corporate tax is 70%).
Insurance Premium Employer Share Support:
The employer’s insurance premium share, which should be paid for additional employment and which corresponds to minimum wage, shall be met by the Ministry.
Interest Support represents a financial support provided for instrument credits, which have maturities of at least one year and which are utilized within the scope of the incentive certificate, and the Ministry will, up to 70% of the fixed investment amount registered in the incentive certificate, meet a certain portion of the interest or profit share that are to be paid for such credits utilized (five points in Turkish Liras for regional investments made in the 5th region and two points for foreign exchange credits and credits on foreign exchange index).
Allocation of an Investment Place:
Allocation of an investment place for investments for which an Incentive Certificate has been issued, and within framework of the principles and procedures established by the Ministry of Finance.
An “Investment Incentive Certificate” should be obtained for benefiting from such incentives.
Investors aspiring to benefit from the 5th region incentives in their Energy Efficiency investments can obtain detailed information from the Ministry of Economy, the General Directorate of Incentive Applications and Foreign Capital.