INCENTIVE LAW (47/2000)

Aim of the Law

The aim of this law is to make contributions to economy on an optimal level by incentivizing exports enabling developed and suitable technology investments which provides international competitive capacity and foreign currency saving activities related to research, development, focused on environment protection, employment increasing and has anti- disequilibrium features between structures and zones compatible with development programs prepared within the borders of TRNC.  

Application and Incentive Certificate

Local or foreign natural or legal persons should make an application to State Planning Organization with feasibility reports, preliminary projects for actualization of the above stated, and to benefit from related incentive matters. An Incentive Certificate is given to investors, whose investments are deemed suitable and confirmed, on incentive matters which they will benefit.  

Incentive matters

Investors who have obtained an Incentive Certificate have all or some of the below stated incentive matters within the scope of basis and criteria forecasted in these documents.

   ● 100% (hundred percent) of an investment allowance right is given for the investment to be made instead of                   forecasted discount rate in current tax legislation and 200% (two hundred percent) for cost price of investments to         be made in a sector of particular importance with priority regions for development. Investment allowance right is           put into practice as of the date the Incentive Certificate is given. The amount no benefited in the current year is             transferred to next year and is continued until reaching the amount to benefit from this allowance regardless of               time limit in tax legislation;

   ● Investment matter machines, equipments, semi-finished products,  materials and furniture to be imported are                 exempted from Customs Duty and Fund by the approval of relevant ministry;  

   ● The handing of material, machines, equipments, and furniture are exempted from VAT;

   ● Demands of investors who aim to make investments are prioritized if they hire immovable property for 49 years in        long run from the relevant Departments of the Government;

   ● Long term and low interest investment loans are provided from the “Investment and Export Incentive Fund” via            intermediary bank and Development Bank of Turkey;  

   ● Investments made within the scope of Incentive Certificate are exempted from building license related to relevant          tax, duties, and charges;

   ● Instead of current Stamp Duty tax related to Capital Increase, Reduced Stamp duty rate is applied;

   ● Instead of Stamp Duty and Registration Fees, reduced rates are applied to hypothecation fore credits in relation to          investments within the scope of Incentive Certificate;

   ● In a case where investor business owners or directors within the scope of Incentive Law transfer their immovable         properties to pledge these to receive credit from any Development Bank abroad, the earnings ratio subject to tax           due to that transfer is  (G.V.Y.4(1)(f)(i).

Incentive Certificate Revision

The values indicated in Incentive Certificate can be changed by State Planning Organization as a result of the assessment pursuant to information to be proven and documents. Investments which cannot be completed in forecasted period due to a good reason can be given extra time by the subject matter organization.

Cancellation of Incentive Certificate

Incentive Certificated of investors who do not perform necessary investments forecasted in current legislation and misuse their rights are cancelled and the sum related to benefited matters are collected with penalties and default interest. 

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