Free Zones Trading Turkey

Free Zones Turkey
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The Free Zones Law No. 3218, enacted in 1985 and is still in effect today, was created to govern goods trade through free zones without focusing solely on service sectors or any specialization or clustering based on Trading Turkey.

To be able to understand please check our previous article below related to Free Zones Turkey.

Amendments to current free zone policies are being planned to establish technology transformation following the targets set out in Turkey’s development plans and annual programs, as well as to develop free zones specializing in goods and service sectors that objectivize R & D intensive, high technology, and high added value activities Trading in Turkey.

In this connection, the Ministry of Trade has drafted a draft regulation to reflect the benefits provided to present free zone users to the technology-intensive, high-value-added goods and service industries that will take place in specialized free zones. Exclusive benefits that fulfill the unique demands of the indicated industries are introduced by President Decree No. 2635.

Within the terms of the Presidential Decree Nr. 2635 described above;

  • Exemptions for currently functioning companies in free zones, such as corporation tax, real estate tax, value-added tax exemptions, and other duties and stamp privileges, must be represented for companies operating in specific industries in specialized free zones.
  • Currently, taxpayers’ wages who export at least 85 percent of the FOB value of the commodities they create in free zones are tax-free. Employee salaries are exempt from income taxes, which is to be reflected in some areas.
  • R & D intensive, high-tech, or high-value-added production of goods and services companies in the sector that are established in designated specialized free zones will benefit from rent incentives for their business premises as well as employment incentives for their qualified personnel through a President Decree that will be issued for such activities that occur in the specialized free zones.
  • The Founder and Operator Companies of the Free Zone have interest rate incentives for their investments over Trading in Turkey.

The Benefits of Turkish Free Zones

1. Tax Benefits

Manufacturers’ earnings generated through sales of items manufactured in the zones are exempt from income and corporation taxes until the end of the taxation year, which includes when Turkey becomes a full member of the European Union.
Workers employed by manufacturers who export at least 85 percent of the FOB value of the goods they produce in the zones are exempt from income tax until the end of the taxation year, including the date when Turkey becomes a full member of the European Union.
Stamp duties and taxes are waived for transactions and organized papers connected to activities carried out by manufacturer users in the zones.
In the free zones, there is no property tax on buildings or land.
VAT is not charged on logistics services provided to third countries.
In the free zones, there is no property tax on buildings or land.
VAT is not charged on logistics services provided to third countries.
The income or corporation tax exemption continues for free zone users who received an “operating license” other than “production” before 06/02/2004 during the validity period of the Operating License.

Income and corporation tax exemption is not available to free zone users with an operating license other than manufacturing after February 6, 2004.

2. Medium and Long-Term Planning Possibilities Benefits

An operating license’s validity period is:

Tenant users have a five-year lease.
Manufacturer tenants have a 20-year lease.
Users who construct their own working spaces have 30 years to do so (investor users).
For manufacturer-investor users, the time limit is 45 years.
For investor users, construction plots and buildings on Treasury-owned land can be leased or easement for up to 49 years.

3. Benefits of Profit Transfer

Free zone revenues and earnings can be freely transferred to Turkey or overseas without any restrictions.

4. Foreign Trade Facilitation

Free zone users can acquire products and services from Turkey without paying value-added tax because goods sold to free zones are subject to the export system. Trade between free zones and third nations, on the other hand, is not subject to the foreign trade regime.

Furthermore, commodities of Turkish origin with a value of less than 5000 US dollars or its equivalent in Turkish Lira can be excused from export processes upon request.

5. Custom Duty Procedure of Trade Facility Benefits

Because the free circulation status of Turkish or EU-origin goods carried into the zones remains unchanged, these goods are exempt from customs duty when entering Turkey or the European Union.
While entering the free zones or being exported to a country other than Turkey or the EU, goods from third countries are exempt from customs duty.

6. Easy Access to EU Countries

Since free zones are part of the Turkey-EU Customs Territory, items in free circulation can be sent to EU countries using an A.TR certificate. Customs duties on articles imported from third countries are also not collected at the entrance point to the free zones. However, only after customs duties have been paid over the rates specified in the Common Customs Tariff can commodities of third country origin that are not in free circulation be sent to EU nations using an A.TR certificate.

7. Equality of Opportunity

Regardless of their origin, all businesses can benefit from the incentives and advantages offered in the free zones of Trading Turkey.

8. Limitless Time

The products are allowed to stay in the zones indefinitely.

9. Taking Charge of Trade Activities Demands and Conditions on the Market

Any power over prices, quality, and standards granted to public institutions and agencies by-laws or other legislation are not valid in the Turkish Free Zones unless the producers desire it. In addition, customs and foreign exchange responsibilities are not applicable in the zones under current legislation.

10. Accounting for Inflation: A Possibility

In the Turkish Free Zones, all payments are made in Convertible Currencies or Turkish Lira equivalents.

11. Domestic and international market access

Sales to the local market, except for consumer and dangerous products, are permitted, unlike in most other free zones throughout the world.

12. Less bureaucratic red tape and more dynamic management

Bureaucracy is minimized during the application and operation processes. Professional private sector companies manage free zones.

13. Strategic Location

Turkish Free Zones are close to EU and Middle East markets and the Mediterranean, Aegean, and Black Sea ports and have easy access to international airports and motorways.

14. Infrastructure Standards for Competitiveness

The Turkish Free Zones’ infrastructure is up to par with international norms.

15. Logistics and Supply Chain Management

Turkish Free Zones provide supply chain management options in providing intermediate and raw materials, notably for enterprises who manufacture for export.

For more information on Free Zones foundations of Trading Turkey subject, do not hesitate to contact us.

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