Business in Turkey

The government encourages investment with higher incentives for underdeveloped regions. Incentives are available to both Turkish and foreign investors.

Current Tax Incentives are:

- Customs duty exemption for investment in imported machinery and equipment and associated expenses.

- Investment incentive allowance which may be granted from 40% to 200% of the amount invested. The allowance is deducted from taxable income.

- Other tax exemptions apply to stamp duty and other charges, to encourage investment and exports.

- Exemption of VAT on investment in machinery and equipment on import and purchased locally.

Non-tax incentives may be given, such as loans with lower interest rates.

Free trade zones (FTZs) are designed to encourage trade to and from Turkey. The FTZs are treated as outside Turkey for taxation and customs duty purposes. As a result, no corporation tax for the companies and no income tax on employees salaries, no VAT and customs duties apply in FTZs.