Large-Scale Investment Incentives Scheme

Large-Scale Investment Incentives Scheme

12 investment subjects, which will potentially foster Turkey’s technology, R&D capacity and competitiveness, are supported by Large-Scale Investment Incentives Scheme instruments.

Large-Scale Investments

 

Investment Subject

Minimum Fixed Investment Amount

(million TRY)

1

Production of refined petroleum products

1,000

2

Production of chemical products

200

3

Harbors, harbor services and airport investments

200

4

a)      Automotive main industry

b)      Automotive supply industry

 

200

50

5

Production of railway and tram locomotives and/or tram cars

50

6

Transit pipeline transportation services

7

Electronics industry

8

Production of medical, high-precision and optical equipment

9

Production of pharmaceuticals

10

Production of aircraft and spacecraft and/or related parts

11

Production of machinery (including electrical machinery and equipment)

12

Mining (including metal production)

 

The terms and rates of support provided within the Large-Scale Investment Incentives Scheme are shown in the following table. 

Large-Scale Investment Incentives Scheme Instruments

Incentive Instruments

Region

I

II

III

IV

V

VI

VAT Exemption

YES

Customs Duty Exemption

YES

Tax Reduction

Tax Reduction Rate (%)

50

55

60

70

80

90

Reduced Tax Rate (%)

10

9

8

6

4

2

Rate of Contribution to Investment (%)

Out of OIZ*

25

30

35

40

50

60

Within OIZ*

30

35

40

50

60

65

Social Security

Premium Support (Employer’s Share)

Support Period

Out of OIZ*

2 years

3 years

5 years

6 years

7 years

10 years

Within OIZ*

3 years

5 years

6 years

7 years

10 years

12 years

Upper Limit for Support (%)

Out of OIZ*

3

5

8

10

11

No limit

Within OIZ*

5

8

10

11

No limit

No limit

Land Allocation

YES

Social Security

Premium Support (Employee’s Share)

N/A

N/A

N/A

N/A

N/A

10 years

Income Tax Withholding Allowance

N/A

N/A

N/A

N/A

N/A

10 years

*OIZ: Organized Industrial Zones 

Contribution Rate to Investment Applicable During Investment / Operating Periods

Under Large-Scale Investment Incentives Scheme

Regions

Investment Period

Operating Period

I

20 %

30 %

II

25 %

40 %

III

30 %

50 %

IV

35 %

60 %

V

40 %

70 %

VI

45 %

90 %

The following categories of investment within the Regional and Large-Scale Investment Incentives Schemes can benefit from support granted to a one-grade lower region in terms of tax reduction and social security premium support (employer’s share).

• Investments in Organized Industrial Zones (OIZ)
• Joint investments to be made by at least five companies operating in the same sector with the purpose of greater integration

E.g.: A Region 3-level investment in an OIZ can take advantage of the tax reduction level in Region 4. Similarly, a Region 6-level investment may benefit from an additional 5% contribution to the investment.