Excise duty in major appliances lifted

Excise duty levied on refrigerators, washing machines, vacuum cleaners and small household appliances has been lifted until April 30. While the tax on the sale of prepaid housing was lifted, the value added tax (VAT) decreased to 8 percent for houses with square meterage under 1,000. Excise duty levied on cruise ships, yachts and boats were also lifted without time limit. The Cabinet's decision applies to air conditioners, refrigerators, deep freezes, gas-powered water heaters, thermosiphons, washing machines and tumble dryers, dishwashers, vacuum cleaners, food and fruit presses as well as small electric household appliances.

Finance Minister Naci Ağbal said that tax regulations worth a total of TL 1 billion($270 million) will also positively affect subsidiary sectors. Stating that the Finance Ministry is making arrangements that will contribute to the revitalization of the construction sector, Minister Ağbal said that the ministry has permanently lifted the tax rate of 9.48 per thousand for pre-paid housing sales via the notary public, noting: "Under the new regulations, the construction sector will see a boost in terms of building and sales. Firms that provide housing delivery will receive VAT cash returns on a monthly basis without having to wait for the following period," Ağbal noted.

Bring your Wedding shopping forward

According to the regulation put into effect after being published in the Official Gazette, the tax rate on white goods - previously at 6.7 percent - has been lifted in an arrangement that will be valid until April 30, also to be reflected in prices as a 6.7-percent discount. Since this was particularly good news for those planning to get married, couples have begun to proceed with wedding shopping and sales in the industry are expected to increase.

Furniture prices to decrease

The VAT on furniture has also been reduced, with the VAT rate for wooden and plastic furniture, armchairs and office furniture being issued at 8 percent compared to the 18 percent in a change effective until April 30. Chairman of the Federation of Furniture Industrialists' and Businessmen's Associations (MOSFED) Ahmet Güleçf said that the regulation will provide a substantial discount in the furniture sector, saying: "It absolutely lowers the prices of furniture. Prices are expected to drop by 10 percent. The domestic market will also see a 30-percent boost."

Housing sector welcomes new regulations

Future homeowners and professionals of the housing sector are also pleased with the news. According to the new regulation, housing construction projects under building licenses issued between January 1, 2013 and December 31, 2016, as well as public tenders issued as of Jan. 1, 2013 will see an 8-percent VAT applied for the delivery of homes with a tax value ranging from TL 500 to TL 1,000 per square meter. In this context, 18-percent VAT will be applied for the delivery of houses with a tax value above TL 1,000.

Meanwhile, housing construction projects under building licenses issued after Jan. 1 and public tenders scheduled after Jan. 1 will see a 8-percent VAT applied for the delivery of homes with a tax value ranging from TL 1,000 and TL 2,000 while an 18 percent VAT will be applied for the delivery of homes with a tax value above TL 2,000 per square meter.

The portion of the VAT exceeding TL 10,000, issued this year due to delivery and services, was subject to the deductible tax rate by the Cabinet and cannot be compensated for through discount, will be returned within this year. This amount will also be taken into consideration for annual returns to be made this year on all transactions subject to discounted rates issued last year. For the coming year and subsequent calendar years, this limit will be applied by increasing the previous year's amount by the revaluation rate, determined in accordance with the provisions of the Tax Procedures Code. According to the calculation to be made in this manner, amounts worth TL 50 or less will not be taken into consideration while values exceeding TL 50 will be raised to the nearest fold of TL 100.