Gov't works to increase capital inflow to Turkey

Published 29.06.2017 00:24

While the government has mobilized all resources to attract to Turkey capital seeking a reliable haven, a new page has been turned with the production package realized last week. With 10 key moves in the package's taxation branch, Turkey will be the new address for qualified capital and workforce.

International companies will feel safe with five-year agreements signed with the tax administration and will not pay taxes when establishing their regional centers in Turkey. As new incentives are introduced in many areas, from investment properties to factory construction, from capital companies' share transfer to service abroad, tax incentives will relieve global investors.

Accordingly, the tax administration can sign agreements with international companies for up to five years. Documents of liability in company establishment will be given in electronic form. There will be no fees other than title deed for the supply of the financial lease-related goods.

The build-operate-transfer system will be exempt from the value-added tax (VAT) and the corporation tax. The international companies that set up the regional management center in Turkey will not pay corporate taxes. The cost of company establishments will drop from TL 1,000 to TL 300 ($283 to $85) .

Companies that provide services abroad in the fields of data analysis and vocational training will be exempt from tax. Stamp tax will not be taken from investment properties, factory constructions, marketing abroad, capital companies' share transfer and credit contracts of finance companies. No proportional fee will be given in arbitrations. Financial instruments will be brought into the same situation in the face of tax laws.

Speaking to Sabah regarding the details of the 40-item, 180-day action plan and the economic contributions of the taxation branch of the production package, Finance Minister Naci Ağbal said they submitted the action plan to the Prime Ministry.

Explaining that in the plan they focused on the issues they will begin, finish and get results in 180 days, Ağbal said there are important headings on national property legislation as well as suggestions on immovable management, public financial management system and spending methods.

"There are two titles that I care about the most: Tax applications and immovable management. There is also a study that strengthens taxpayer rights and eases and simplifies tax compliance," he continued.

He said that the production package will attract qualified capital to Turkey and that with the new system, the Finance Ministry will give up the mortgage and the Union of Chambers and Commodity Exchanges of Turkey (TOBB) will drop its service fees by half, adding that all fees are lifted except for title deeds related to the supply of financial leasing-related items to financial leasing companies.Recalling that in the current system, tax administration makes a three-year agreement with international companies, Ağbal said: "Here, the period has been increased to five years, and we will not receive corporate taxes from the companies that set up the regional management center in our country."

He added that if a company offers 85 percent of its business activities by bringing services and customers from abroad, income tax will not be taken from the people it employs.

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