English
Türkçe
РусскийAmendments To Free Zones Act No.3218
Printer-friendly version
Send to friend
PDF The Free Zones Act No. 3218 was amended considerably on 25/11/2008, and the income tax exemption applied to those working in free zones by 31/12/2008 under several conditions has been extended. With the said amendment, the outlines of the taxational framework for the free zones are as follows:
FROM THE POINT OF INCOME AND CORPORATE TAX
Of the taxpayers who had acquired operating license to operate in the free zones by 06/02/2004, the proceeds they have acquired from their operations in the zones are exempted from income and corporate tax, provided that this exemption is limited with the period specified in their licenses. With regard to the proceeds the taxpayers who perform manufacturing operation in free zones have acquired from the sale of such products they manufacture, the exemption period is not the period specified in the operation license, but instead, the exemption is valid until the end of the year Turkey becomes the full member of the European Union. Besides, for such manufacturer taxpayers, the condition of acquisition of operation license by 06/02/2004 is not valid, and the manufacturers who have started to operate recently can benefit from this exemption as well.
FROM THE POINT OF WAGE WITH HOLDING
Whereas, prior to 25/11/2008 amendment to the act, the wages the taxpayers who had acquired operating license by 06.02.2004 have paid to the personnel they employ in the free zones have been exempted from the income tax until the date specified in their operation licenses, if it is a date before 31/12/2008, or by the yearend if it is a date after 31/12/2008, the period is extended by the amendment dated 25/11/2008 made to the free zones act made. According to the new regulation, as of 01/01/2009, the wages the taxpayers who export minimum 85% of the FOB price of the products produced in free zones pay to the personnel they employ will not be subject to income tax withholding until the end of the taxation period of the year when full accession to the European Union is achieved. It will be checked as of the yearend whether the exportation conditions has been met. Thus, if it is considered that the exportation condition can be met as of the yearend, it will be possible to apply tax exemption to the wages starting the beginning of the year. If the annual sale amount remains below this level, the taxes that have not been collected on time due to exemption practice will be collected with default interest but without penalty.
The Council of Ministers is authorized to decrease the 85% rate sought in the article for exportation up to 50%. The Council of Ministers has not used its said authority yet.
