Amendment Made to the Investment Incentive Decree for Certain Tourism Investments...
An Amendment Has Been Made to the Investment Incentive Decree for Tourism Investments.
Decree No. 2018/11651 on Amending the Decree on State Aid for Investments, concerning certain tourism investments, was published in the Official Gazette dated 28 April 2018 and numbered 30405.
With this Decree, a provisional Article 10 was added to the Decree on State Aid for Investments put into force by Council of Ministers Decision No. 2012/3305, establishing new support elements for tourism investments with a minimum bed capacity of 7,500 to be carried out by one or more investors in Culture and Tourism Conservation and Development Zones (KTKGB).
1) Culture and Tourism Conservation and Development Zones (KTKGB)
Culture and Tourism Conservation and Development Zones refer to the zones whose boundaries are proposed by the Ministry of Culture and Tourism and identified and announced by Council of Ministers decision, in order to protect, utilise and assess regions that contain a high concentration of historical and cultural values and/or have high tourism potential, with the aim of ensuring sectoral development and planned growth.
You can access the current list of KTKGB at this link.
2) Supports to be provided
According to the Decree, for tourism investments with a minimum bed capacity of 7,500 to be carried out by one or more investors in a KTKGB, the following supports, rates, durations, amounts and conditions may be applied, while the provisions of the regional support elements applied in the 5th region that are not specified in this article remain the same. In other words, the 5th Region supports will be applied for the supports not specified in this article; however, among the 5th Region supports, the interest support, the tax reduction support, the employer's share of insurance premium support and the VAT refund support will be applied at the rates and durations set out in this Decree.
For example, the interest support applied in the 5th Region at 5 points for TL loans and 2 points for foreign-currency loans and foreign-currency-indexed loans will, under this Decree, be applied at 7 points for TL loans and 3 points for foreign-currency loans and foreign-currency-indexed loans.
a) Interest Support
For investment loans with a maturity of at least 1 year to be obtained from banks, up to 7 points of the interest or profit share payable on the portion corresponding to up to 80% of the fixed investment amount registered in the incentive certificate for Turkish Lira loans, and up to 3 points for foreign-currency loans and foreign-currency-indexed loans, may, if also deemed appropriate by the Ministry, be covered from budget resources provided that it is paid for the first 10 years. The amount of interest support cannot exceed 20% of the realised fixed investment amount.
b) Tax reduction support
Within the scope of the tax reduction support, the contribution-to-investment rate will be applied as 55%, the tax reduction rate as 90%, and the rate at which the total contribution-to-investment amount can be used on earnings to be obtained from other activities during the investment period as 100%.
c) Employer's share of insurance premium support
If requested by the investor, the application of the employer's share of insurance premium support may be started within the investment period without the requirement of an investment completion visa, while the maximum support amount and duration remain the same.
d) VAT refund support
Building construction expenditures to be made within the scope of certified investments with a fixed investment amount of 100 million Turkish Lira and above may benefit from the VAT refund.
3) Benefiting of certain investments among those not to be incentivised from these supports
As is known, pursuant to Council of Ministers Decision No. 2012/3305, congress and exhibition centres, wellness facilities and day-trip facilities are among the investments not to be incentivised. However, with this Decree, separately certified congress and exhibition centres, golf facilities, wellness facilities and day-trip facilities may also benefit from the supports within the scope of this article.
4) Condition for starting the investment
According to the Decree, in order for the investment to be considered started, an expenditure of at least ten percent of the fixed investment amount on the date the incentive certificate was first issued, or a minimum of five million Turkish Lira, must be made within one year as of 28.04.2018.
5) Completion of the investment
Applications for the incentive certificate and completion visa to be made to the Ministry of Economy will be assessed collectively after the minimum bed capacity of 7,500 has been reached. The completion date of the investments is 31.12.2022, and no extension of time will be granted other than in cases of force majeure or extraordinary circumstances. In order for the completion visa of certificates issued within the scope of this article to be carried out, the investment must be completed and the tourism operating certificate obtained by this date, and the application must be made within 6 months following this date.
6) Failure to meet the condition for starting the investment or failure to complete the investment
In the event that the condition for starting the investment is not met or the investment is not completed as of 31/12/2022, and if requested; for accommodation investments, provided that the condition for benefiting from regional supports is met, the supports registered in the incentive certificate will be converted into 5th region supports and any excess supports benefited from will be recovered within the framework of the provisions of Law No. 6183 on the Procedure for the Collection of Public Receivables.
You can access the Decree in question via the link below.