Q. What are the tax advantages for a resident ESBAS company with a manufacturing license?
A. Profits of companies with manufacturing licenses derived from sales of products manufactured in Turkish Free Zones are exempt from income and corporate taxes. This exemption is valid until the end of the license period for companies established before February 6, 2004. Companies established after February 6th, 2004 and companies with renewed licenses are exempt from the aforementioned taxes until the end of the taxation period or until Turkey's first membership year in the European Union.
The wages of the workers employed by Companies that export at least 85% of the goods are exempted from income tax.
Companies operating in the Free Zone may purchase goods inside and outside the country without paying any VAT.
Free Zone companies are exempt from import costs such as Customs Tax, SCT (Special Consumption Tax), and RUSF (Resource Utilization Support Fund) for imported goods.
Q. Do the personnel employed in the Free Zone have the same rights with employees working outside the Free Zone?
A. Provisions of labor legislation in Turkey apply as well as within Free Zones.
Q. In which transactions and cases will a Special Account Fee be paid?
A. A Special Account Fee shall be applied at the rate of 0.1% over the CIF values of goods imported into the Free Zone, and at the rate of 0.9% over the FOB values of goods sent into Turkey from the Zone. This fee is collected from the user companies in the Free Zone; companies, who have obtained their licenses before February 6th, 2004 and are which are exempt from Corporate Tax; and the manufacturing companies benefiting from the Corporate Tax exemption.
Companies other than those manufacturers who have obtained their licenses before February 6th, 2004, will not pay this fee since they are subject to tax.
A Special Account Fee is not collected for goods brought from abroad for investment, as well as those goods purchased free of charge from abroad for processing purposes.
Q. What do activity licenses cost? How long can Companies operate?
A. In Free Zones, activity fields have been grouped for manufacturing, trading, assembling-disassembling, maintenance-repair, banking, and other fields. Companies must pay a license fee of $5000 for each field they wish to operate within. Activity license periods are 20 years for manufacturing, and 15 years for trading and other fields. For investor companies, these periods have been determined as 45 years for manufacturing and 30 years for other licenses.
Q. What is needed to establish a Free Zone addressed company?
A. All natural and legal entities wishing to operate in Free Zones must first fill out the activity license application form, pay the activity license fee of $5000, and submit a file with all relevant attachments to the General Directorate of Free Zones (GDFZ). After the approval of GDFZ, foundation and leasing procedures of the company can be completed. An Activity license is issued when GDFZ receives the documents of foundation and the contract.
Q. Can a 100% foreign capital company be established in a Free Zone?
A. Provided they are not sole proprietorships, foreign capital companies that are 100% foreign natural and legal entities can be established in the Zone.
Q. Which books (financial records) are kept in Free Zones?
A. All books required by the provisions of Turkish Code of Commerce shall be kept by Free Zone users. In addition to these books, a separate inventory book listing the entrance and exits of goods shall also be kept.
Q. Which authority shall be responsible for approval of the books kept in the Free Zones?
A. As per the provisions of Turkish Code of Commerce, all books shall be approved by the notary, whereas the inventory book enlisting the entrance and exits of goods shall be approved by the Regional Directorate and the Directorate of Customs.
Q. Can our payments be made in TL currency in the Free Zone?
A. Yes, but only for expenses made during the investment stage. Payments of consumables purchased within the country can also be made in TL.
Q. How can Free Zone companies purchase goods from within Turkey?
A. Goods sent to the Free Zone from within the country are subject to the export regime. Accordingly, Free Zone companies can purchase goods without VAT within the country. Zone companies can also purchase goods for investment and consumption purposes without VAT, but are subject to the export regime. Furthermore, it is possible for such purchases of less than $5000 USD to be paid in the Free Zone under simple VAT procedures without being subject to the export regime VAT.