Why Free Zone?
Free Zone Advantages - Investment Incentives
In accordance with the investment incentive legislation in Türkiye, discounts and exemptions are provided at rates determined according to the province and district where the investment is made and the goods to be produced. In order to benefit from investment incentives, certain conditions such as minimum investment amount must be met. In addition, in the regional incentive system, investment regions are grouped from 1 to 6, and discounts and exemptions are applied at different rates on the basis of these regions.
On the other hand, the expenditures incurred due to the investments to be made within the scope of the investment incentive certificate must be documented and applied to benefit from the exemption.
Detailed information on investment incentives can be accessed from the link below:
https://www.sanayi.gov.tr/destek-ve-tesvikler/yatirim-tesvik-sistemleri
In free zones, exemption from all taxes (corporate tax, value added tax (VAT), customs duty, employee income tax, KKDF) is offered to investors as a package for producer exporters. There is no regional or sector/product-based difference between free zones in terms of the application of these exemptions. Moreover, it is sufficient to obtain a free zone activity license and start operations, and there is no need to make a separate application to benefit from the exemptions.
Again, while tax reductions in investment incentives are applied up to 50% in certain items and for a period of time, exemption from corporate tax and customs duties in free zones is provided at 100% and indefinitely.
In addition, the personnel income tax exemption (withholding tax) granted to exporters in the free zone, provided that 85% of the production is exported, is not included in the scope of investment incentives.
Free Zone Advantages - Inward Processing Regime (DIR)
In the Inward Processing Regime, collateral is paid at certain rates in return for taxes for the goods brought to Türkiye, and the Foreign Currency Utilization Rate and wastage rates must be met for the goods to be exported after the activity.
In Inward Processing, it is obligatory to export 100% of the goods produced from the inputs brought into the country. After the completion of production and export transactions within the scope of the Inward Processing Permit Certificate (DİİB), an Expertise Report is required at the stage of closing the Inward Processing Permit Certificate. These procedures are repeated for each Inward Processing Permit Certificate closure.
Detailed information about the Inward Processing Regime and its applications can be accessed from the link below: https://ticaret.gov.tr/ihracat/mevzuat/dahilde-isleme-rejimi
In the case of free zone activities, investors are granted full customs duty and VAT exemption on a permanent basis without the need for further application.
In addition, producer exporters operating in free zones are exempt from corporate tax and other taxes and duties that are not provided to those producing within the scope of DIR (except for the provisions of investment incentive legislation).
Free Zone Advantages – Bonded Warehouse
Goods brought from abroad and not to be nationalized can be stored in bonded warehouses for a certain period of time by providing a guarantee. In free zones, on the other hand, it is possible to buy and sell with the possibility of storage without any time limit and collateral. Free zones also allow handling operations such as labeling and packaging for the goods traded.
