An Evaluation on Super Incentive Implementation

By Ziya Akbaş, Aselsan Independent Board Member

Issue 72

I. Preface

The Investment Incentive Program, which was introduced to the public in April 2012, entered into force on 15 June 2012 with the decision on State Aids for Investment No 2012/3305. Procedures and principles for the implementation of the Decision have been defined with the Communiqué numbered 2012/1. 

A decision regarding the renewal of the incentive system has been taken in order to continue the progress of the economy, which created positive results thanks to the program mentioned above, and to make Turkey an investment base.

The Council of Ministers, which introduced this new system as “Super Incentive”, has taken “Decision on granting Project-based State Aids to Investments No. 2016/9495” which will attract investors by this system. In this article, the details of the system are mentioned below.

II. Turkey As Investment Base

Projects, which are worth 100 million dollar and of a special importance for the Turkish economy, will be determined and negotiations will be held via notification or invitation method with the investors who seek to invest in this context. 

These activities will be carried out by the Council of Ministers and also the incentives for the projects will be approved by the Council of Ministers.

Sectors Subject to the Project Based Super Incentive Implementation

Possible sectors that may be included in the scope of Project Based Incentive Implementation are listed below:

Integrated Metallurgy Investments (Iron and Steel Investments)

Health and Pharmaceutical Investments, Blood Products

Space, Defense Industry and Aviation Investments

Technical Agricultural Investments

Investments in Energy Technologies (such as investments based on nuclear energy and machinery manufacturing)

This Decision aims to:

Meet the critical needs of our country that may arise in the present or the future

Ensure the supply security  

Reduce the foreign dependency 

Provide technological advancement 

Maintain innovative and high-value-added investments based on R & D

Scope of Support to be Provided

Details regarding the scope of the support which to be provided in project-based incentive implementation are given below. 

Thus the Council of Ministry is authorized to;

apply the corporate tax rate up to 100% discount and determine the investment contribution rate which not to be exceed 200% or to apply on corporation tax exemption that limits to earnings from investment up to 10 account periods from the date of the investment goes on to operation according to the Article 32 / a of the Corporate Tax Law No 5520 dated June 13, 2006, 

give the benefit of the income tax withholding incentive provided in the temporary article 80 of the Income Tax Law no. 193 dated 31.12.1960,

Grant exemption of customs duties,

establish a free easement right will be for 49 years or grant an occupancy permit and if the investment is completed and the projected employment is provided for 5 years to transfer the treasury immovable free of charge, directly without collecting any revenue share, in favor of the investor  to be determined in case the investment is made on the Treasury real estate,

cover up to 10 years of employer share of insurance premium regardless of the lower limit of the basic earnings which provided in the additional Article 2 of the Law No. 5510 dated 31.05.2006, 

cover up to 50% of the energy consumption expenditure for the investment during the operating period for maximum 10 years, 

provide a dividend or a grant  support for the investment loan used in the financing of fixed investment amount up to 10 years,

provide wage support up to 20 times of the monthly gross amount of the minimum wage to a maximum 5 years  for each qualified employee in the designated number of special importance for investment,

become a shareholder in an investment where the amount of the investment shall not  exceed the 49% and with the condition that the acquired shares are offered to the public or sold to the investor within 10 years.

apply VAT Return (Building – Construction)

apply VAT Exemption

exempt investments with investment incentive certificates from stamp duty with regard to the arrangements for the implementation of the Tax Law No. 488 which is in the Law on Amendments in Certain Laws for the Improvement of the Investment Environment numbered 6728 and dated 15/07/2016 which enacted and published in the Official Gazette dated 09.08.2016 and numbered 29796.  


According to the findings made in the above detailed analyzing in regard to the Super Incentive System, it is obvious that this law will make Turkey an investment base. I believe that the planned support will need to be expanded.

In this context, the incentives that are considered to be expanded are listed below:

government incentives should be monitored and implemented with an integrated manner by a single authority, 

Investments in which have been started and continuing in the prior period and investors of them should also be protected,

In terms of trade and legal legislation, the issues which will concern the investors should be revised,

The “Investment Advisor” companies, which will be the biggest supporter of the investors in notifying, directing, informing, preparing necessary documents and following-up of the incentives, should be authorized by the ministry, 

Investors should be followed by the same expert from the beginning of the investment to the completion visa. 

III. Conclusion

As a result, this new incentive package needs to be explained in detail to international and national investors and when the explanation stage is completed, investments will be attracted to Turkey rapidly. It is clear that the Government and the Public are having important duties on advertising the new incentive package. In this context, it is recommended to take the support of economic entities, the media and large organizations at the same time.