18.04.2023/57

18.04.2023/57

Areas Affected by the Earthquake Will Benefit from the Incentives Under the Attraction Centers Program.

The Decision to Amend the Decision on Supporting Investments Within the Scope of the Attraction Centers Program, published in the Official Gazette No. 32154 on 05.04.2023, includes the following regulations:

1) Districts to Benefit from the 6th Region Support Within the Scope of the Attraction Centers Program

A temporary 1st article was added to the Decision on Supporting Investments Within the Scope of the Attraction Centers Program No. 2018/11201, stating that investments of at least 1,500,000.00-TL in the districts listed below will benefit from the 6th region support elements, under the conditions, rates, and durations applied in this region:

2) Status of Ongoing or Damaged Investments

According to the second paragraph of the aforementioned article;

• Investments to replace investments damaged by the earthquake,

• New investments, including those within the scope of investment incentive certificates that are still ongoing and have not yet received completion approval

are evaluated within this scope.

Therefore, these investments will also benefit from the sixth region support under the Attraction Centers Program.

3) Exception to the Investment Topics that Will Not Be Encouraged or Will Be Conditioned According to the Investment Support Decision

The fourth annex of the Investment Support Decision contains “Investment Topics Not to Be Encouraged or to Be Encouraged under Certain Conditions”. According to the new regulation, investment topics for manufacturing industries with US-97 Code: 15-37 will not be subject to the provisions of the mentioned Decision’s Annex-4. Therefore, these investments will be considered as eligible for support.

However, investments related to the production of iron and steel products will only be evaluated within this scope if they involve the renewal of investment elements damaged by the earthquake. Therefore, iron and steel production investments that do not aim to renew the elements damaged by the earthquake will remain under the category of investments that will not be encouraged or will be subject to conditional encouragement.

For ready-mix concrete investments, only complete new investments with a minimum capacity of 100 m3/hour will be supported; investments that do not meet these conditions will not be supported.

As a result, the scope of supported sectors under this article has been significantly expanded.

4) Limit for Interest and Profit Share Support

There are two limits for the interest and profit share support to be applied within this scope. For investments evaluated under this article, the interest or profit share support cannot exceed 10% of the fixed investment amount and cannot exceed thirty million Turkish Liras.

For loans and financial leasing debts used before the effective date of this Decision, and for which interest or profit share support has been received, support will continue until the end of the support period, without exceeding the specified limits in this paragraph, and the applicable interest or profit share support score will not be changed.

5) Employer’s Social Security Premium Contribution Support and Social Security Premium Support

For investments made to replace those damaged by the earthquake, employer’s social security premium contribution support and social security premium support will be applied following the completion of the investment, based on the average number of employees reported in the monthly premium and service certificate submitted to the Social Security Institution between 1/8/2022 and 31/1/2023 (for seasonal investments, the previous year’s seasonal employment averages will be considered):

a) For facilities that were destroyed by earthquakes or were decided to be demolished due to damage, 100% additional employment,

b) For heavily damaged facilities, 25% existing employment and 75% additional employment,

c) For moderately damaged facilities, 50% existing employment and 50% additional employment,

d) For lightly damaged facilities, 75% existing employment and 25% additional employment,

e) For undamaged facilities, 90% existing employment and 10% additional employment will be accepted and applied.

For moderately damaged, lightly damaged, and undamaged facilities, the total of the employer’s social security premium contribution support and social security premium support cannot exceed 2% of the fixed investment amount.

For this scope, the damage type will be based on the damage assessment report issued by the Ministry of Environment, Urbanization, and Climate Change.

Undamaged facilities will be evaluated within this scope if the investor obtains a report from the relevant insurance company or the Ministry’s Provincial Directorates regarding the damage to machinery and equipment.

6) Provisions Not to Be Applied

Some articles of the Decision on Supporting Investments under the Attraction Centers Program, numbered 2018/11201, will not be applied for investments to be made under the temporary first article.

The provisions of Article 1, Paragraph 2, Articles 3, 4, and 5, and the fourth and sixth paragraphs of Article 8 of this Decision will not apply within this scope.

Therefore, certain restrictive conditions required by the aforementioned articles regarding supports will not be applied to investments under the temporary first article.

You can access the relevant Decision here.

Best regards,

BİLGENER