18.05.2022/34
On Subregional Supports and Amendments to the Districts that can Benefit from these Supports
Subregional Supports
According to Article 18/5 of the Decree No. 2012/3305 on State Aids in Investments (Decree), investments to be realized in the districts of the provinces of the 1st, 2nd, 3rd and 4th regions in Annex (7) of the Decree benefit from the regional supports provided to one sub-region of the province where the district is located, and investments to be realized in the organized industrial zones or industrial zones of the said districts benefit from the regional supports provided to two sub-regions of the province where the district is located.
For example, although Kastamonu is a province in the 4th region, an investment to be made in Daday district can benefit from the 5th region supports since it is one of the districts of this province in Annex-7. Or, in an investment to be made in Acıgöl Organized Industrial Zone of Nevşehir, one of the provinces of the 4th region, since Acıgöl district is one of the districts in Annex-7, the supports provided for the 6th region, which is two sub-regions, will be applied.
The regional supports provided for the 6th region are applied to the investments to be realized in the districts of the 5th region provinces in the aforementioned annex. For the investments to be realized in the organized industrial zones or industrial zones of these districts, the supports of the 6th region are applied by adding two years to the period valid in the region for insurance premium employer’s share support and five points to the investment contribution rate valid in the region for tax deduction support.
Status of 6th Region Supports within the Subregion
On the other hand, according to the Decree No. 2012/3305, in the investments made in the 6th region; the portion of the insurance premium corresponding to the minimum wage of the worker’s share can be covered from the Ministry’s budget on behalf of the employer for ten years following the completion of the completion visa.
Again in the investments made in this region; the income tax calculated over the portion of the workers’ wages corresponding to the minimum wage for the additional employment provided by the investments can be canceled from the tax accrued on the withholding tax return to be submitted for ten years from the date the investment becomes partially or fully operational.
However, it is regulated in Article 18/5 of the Decree that in case of benefiting from the 6th region supports within the scope of the sub-regional application, the aforementioned insurance premium support and income tax withholding support cannot be benefited from.
However, with the amendment made to Article 23 of the Income Tax Law by Law No. 7349, the wages of the employees corresponding to the amount remaining after deducting the employee social security institution premium and unemployment insurance premium from the monthly gross amount of the minimum wage valid in the month in which the payment is made are exempt from income tax. Therefore, the income tax withholding support for investments to be made in the 6th region is no longer applicable. Accordingly, investors who benefit from the 6th region supports within the scope of the sub-region application cannot benefit only from the support for insurance premium employee share.
For investments that are not within the scope of the sub-region but are actually made in the 6th region, it is natural that insurance premium worker support can be utilized.
Changes in Districts Eligible for Subregional Supports
In the Official Gazette dated 13.05.2022 and numbered 31834, the Decision Amending the Decision on State Aids in Investments was published. With this Decision, the list of districts that can benefit from the sub-regional support has been updated.
After the amendment, you can access the updated list of districts in Annex-7 here.
Sincerely,
BİLGENER
