According to the Income Tax Law, if a person invests between 31.05.2012 and 31.12.2023 in provinces determined by the President based on statistical regional units, per capita national income, or socio-economic development levels, and the investment is covered by investment incentive certificates issued by the Ministry of Economy, they can benefit from a tax deduction from the income tax calculated on a portion of their workers’ wages, corresponding to the gross amount of the minimum wage applied to workers over 16 years of age in the industrial sector. The deduction applies to the tax accrued on the withholding tax return for a period of 10 years from the date when the investment becomes partially or fully operational.
Free Zone Incentives
According to the Free Zone Law, the profits derived from the sale of products manufactured by free zone users operating within the scope of the Activity License are exempt from Income or Corporate Tax until the end of the taxation period of the year in which European Union membership is realized. The wages paid by users who export at least 85% of the FOB (Free on Board) value of the products produced in free zones to personnel employed are exempt from income tax. The transactions carried out and documents issued related to the activities performed in the free zones by free zone users engaged in production activities are exempt from stamp duty and charges.
Reduced Corporate Tax
According to the Corporate Tax Law, the profits derived from investments specified in the Corporate Tax Law and tied to an incentive certificate by the Ministry of Economy are subject to corporate tax at reduced rates until the contribution to the investment amount is reached, starting from the accounting period in which the investment is partially or fully operational. The exceptions are financial and insurance sectors, business partnerships, contract works, investments made under the law dated 16/7/1997 and numbered 4283, and the law dated 8/6/1994 and numbered 3996, as well as investments made pursuant to royalty agreements. Foreign investors benefit from the relevant provision.
