Recent Changes In State Aid Regulations

In light of its recently revised state aid regulations, it seems that Turkey is aiming to increase the appetite of foreign investors, who have become more cautious about investing in the country on account of the lacklustre global economy. The Turkish Prime Minister announced the new state aid package on 2 April 2015; the regulations entered into force on 8 April 2015. These new measures increase the support provided for investments, in particular to those that are made during the course of the current year (2015).

The basic tools for this increased support consist of (i) governmental support for Social Security Premium payments for an extended term; (ii) increased support for corporate and income tax reductions to be applied on investment expenses, and (iii) exemption from having to make payments to the Resource Utilization Support Fund (i.e. the KKDF tax – Kaynak Kullanımı Destekleme Fonu), which is a de facto 6% tax applied on the import of certain investment