02.10.2024/53
Taxpayers Engaged in Production Activities in Free Zones Can Benefit from the Exemption Only for the Products They Sell Abroad
With the Law No. 7524, subparagraph (a) of the second paragraph of the provisional Article 3 of the Free Zones Law has been amended. Accordingly, to be applied to the earnings obtained as of 1.1.2025, only the earnings of the taxpayers engaged in production activities in free zones from the sale of the products manufactured in these zones abroad are exempted from income or corporate tax, and the domestic sales of the manufactured products are excluded from the scope of the exemption.
The explanations on the subject are included in the Corporate Tax General Communiqué Serial No. 23 published in the Official Gazette dated 28.09.2024 and numbered 32676. According to the regulation, the principles of the exemption for production activities in free zones are as follows:
- Taxpayers engaged in manufacturing activities in free zones manufacture in the zones
The profits derived from the sale of products abroad are exempt from corporate tax until the end of the annual taxation period including the date of Turkey’s full membership to the European Union.
- The delivery of the products of the producer companies engaged in production activities in the free zone to the exporters operating in the same or another free zone, provided that they are sold abroad, will also be considered as sales abroad.
- In this way, in deliveries made with export registration, it is not possible for the exporting companies to benefit from the exemption, since the producer companies will benefit from the exemption.
- The goods in question must be exported within three months from the beginning of the month following the date of delivery to the exporter.
- If not exported within this period, the foreign sale of these goods shall be considered as not realized.
The example in the Communiqué on the subject is given below:
“Example: (A) A.Ş., which is engaged in manufacturing activities in the free zone, earned 1.000.000 TL from the domestic sale of the products it manufactured in the 2025 accounting period and 2.000.000 TL from the sale abroad. 2.000.000 TL obtained from the sale of the products manufactured by (A) A.Ş. to abroad will be evaluated within the scope of the exemption, and 1.000.000 TL obtained from the sale of domestic sales will not be covered by the exemption.”
You can access the relevant Communiqué here .
Sincerely,
BİLGENER
