The Law Amending Tax Laws, Certain Laws And Certain Decree Laws Numbered 7013 Enters Into Force

The Law Amending Tax Laws, Certain Laws and Certain Decree Laws numbered 7103 (the “Law”) has been published in the Official Gazette dated 27 March 2018 and numbered 30373.

The Law brought amendments to tax laws, the Electricity Market Law, investment incentives legislation and several other matters (the “Amendments”).

With the Amendments, nuclear investments will now be classified as “priority investments” for the purposes of the Decree on State Subsidies on Investments. Accordingly, the Akkuyu Nuclear Power Plant Project and the Sinop Nuclear Power Plant Project will be entitled to benefit from the incentives and subsidies provided by the Decree on State Subsidies on Investments as such “priority investments”;

The Amendments also introduced an exemption from charges and stamp taxes which will now apply with respect to preliminary licensing procedures for electricity generation facilities;

Additionally, the Amendments now provide for foreign currency capital investments in the context of investments eligible for incentive schemes to now benefit from additional tax exemptions. Foreign currency capital sourced from abroad that is invested in Turkish companies with limited liability which are full taxpayers within the charge to Turkish taxes will not be taxed subject to compliance with requirements on utilisation, reserve accounting and retention.

Lastly, the Amendments provide an exemption from VAT which will now apply to infrastructure investments such as waterworks, sewage treatment, natural gas, electricity distribution facilities and road constructions in Organised Industrial Zones and small industrial sites. An exemption from VAT will also apply to new machinery and equipment purchases made until 31 December 2019 in connection with R&D, innovation and design activities carried out in technological development zones, R&D centres, design centres and research laboratories.

Authors:

Murat Soylu

Can Özilhan

Deniz Kepenek