22.12.2022/83
Exemption Period Extended for New Machine and Equipment Deliveries to VAT Payers Holding Industrial Registry Certificate
With the temporary 39th article added to the VAT Law by Article 31 of Law No. 7103:
– Starting from 01.05.2018, new machines and equipment delivered exclusively for use in the manufacturing industry to VAT taxpayers holding an industrial registry certificate in accordance with the Industrial Registry Law No. 6948, dated 17/4/1957,
– New machines and equipment delivered exclusively for use in R&D, innovation, and design activities to those working in technology development zones and specialized technology development zones under the Technology Development Zones Law No. 4691 dated 26/6/2001, R&D and design centers under the Law on Supporting Research, Development, and Design Activities No. 5746 dated 28/2/2008, and research laboratories under the Law on Supporting Research Infrastructures No. 6550 dated 3/7/2014,
are temporarily exempt from VAT.
With the Presidential Decree No. 6583 published in the Official Gazette No. 32050, dated 21.12.2022, the exemption period for the deliveries of machinery and equipment listed in the temporary 39th article of the VAT Law has been extended until 31.12.2024.
Furthermore, under Article 13/1-m (the paragraph added by Law No. 7104) of the aforementioned Law, the deliveries of new machines and equipment made exclusively for use in R&D, innovation, and design activities in the technology development zones and specialized technology development zones under the Technology Development Zones Law No. 4691, R&D and design centers under the Law on Supporting Research, Development, and Design Activities No. 5746, and research laboratories under the Law on Supporting Research Infrastructures No. 6550, are exempt from VAT.
Accordingly, the regulation regarding the deliveries included in the exemption under the temporary article has been made permanent with this paragraph. As a result, only new machine and equipment deliveries made exclusively for use in the manufacturing industry to VAT taxpayers holding an industrial registry certificate according to the Industrial Registry Law remain covered under the temporary article exemption.
Therefore, it can be said that the Presidential Decree extending the exemption period only applies to new machine and equipment deliveries made exclusively for use in the manufacturing industry to VAT taxpayers holding an industrial registry certificate.
Only VAT taxpayers holding an industrial registry certificate under Law No. 6948 can benefit from this exemption.
The list of machines and equipment to be delivered under the exemption for exclusive use in the manufacturing industry by VAT taxpayers holding an industrial registry certificate is determined in the annex to the Cabinet Decision No. 2018/11674, dated 30.04.2018. No exemption is applied to the deliveries of machines and equipment not listed in this annex.
Since the exemption applies to the delivery of “new” machines and equipment, the machines and equipment to be delivered under the exemption must be unused. Furthermore, machine parts, components, accessories, and auxiliaries are not covered under the exemption.
The taxes paid on deliveries under this scope are deducted from the tax calculated on taxable transactions. Taxes that cannot be offset through deduction are refunded upon the request of the taxpayer carrying out the transaction under the exemption, according to Article 32 of the VAT Law.
You can access the relevant Presidential Decree here.
You can access the Cabinet Decision here.
Best regards,
BİLGENER
