Law No. 7555 on the Protection of the Value of the Turkish Currency and Amending Certain Laws and Decree Law No. 635, which was published in the Official Gazette on 24 July 2025, introduced significant changes to various tax laws.
1.Restrictions on the Reduced Corporate Income Tax Incentive for Promoted Investments.
- The maximum duration for benefitting from the reduced corporate tax incentive has been limited to 10 years, until the investment contribution amount is reached.
- The corporate tax reduction rate, previously applied between 50% and 90% depending on the region, has been standardized to a flat 60% rate across all regions.
- The application of the reduced rate to other income has been restricted to the first four fiscal periods, including the period in which the right to the incentive was first exercised.
- These amendments to the reduced corporate income tax regime will apply only to investment incentive certificates issued on or after 24 July 2025, excluding applications submitted before 16 June 2025 that have not been rejected.
2. Increases Introduced in Both SCT Rate Tiers and Percentages for Automobiles
- Pursuant to the legislative amendments, the Special Consumption Tax (SCT) rates of 45%, 50%, 60%, and 70% have been increased to 80%, while the 130% rate has been increased to 150%. ,
- The same Law grants the President of the Republic the authority to determine differentiated SCT rates for motor vehicles based on the following criteria: SCT base groupings, engine power, type and class, body style and structural definition, emission type and emission value, payload capacity, passenger and cargo carrying capacity, and for passenger vehicles and vehicles primarily manufactured for the transport of persons: engine displacement, driving range, and battery capacity.
- Under Presidential Decree No. 10115, published in the Official Gazette on the same day, two new subcategories were introduced for automobiles with an engine displacement not exceeding 1,600 cm³: “those not exceeding 1,400 cm³”, and “those exceeding 1,400 cm³ but not exceeding 1,600 cm³”. For these subcategories, the minimum SCT rate was increased from 45% to 70%, and the maximum SCT rate was raised from 80% to 100%.
- Under the same decree, SCT rates were also revised for all types of vehicles, including those with internal combustion engines, hybrid engines, and electric motors, as follows: For electric vehicles, the minimum SCT rate is set at 25%; For plug-in hybrid vehicles, at 45%; For petrol, diesel, and LPG vehicles, at 70%; For hybrid vehicles, also at 70%. The maximum SCT rate applicable across all vehicle types is now 220%.
- The previously lowest SCT rate of 10% applicable to electric vehicles has been increased to 25%.
3. The Special Consumption Tax (SCT) rate for double-cab off-road vehicles (pick-ups), which are classified among open-bed pickup trucks, has been increased from 4% to 50%.
- The income tax withholding incentive and stamp duty exemption applied to R&D, design, and support personnel working in technoparks and R&D centers have been limited to forty times the gross minimum wage.
- A Special Consumption Tax (SCT) and Value Added Tax (VAT) exemption has been introduced for vehicles to be used exclusively for national defense and internal security needs by the Ministry of National Defense, the Ministry of Interior, the Presidency of Defense Industries, and the National Intelligence Organization. This exemption applies to: vehicles listed in List (II) annexed to the SCT Law with at least 40% domestic content; goods transport vehicles under tariff heading 87.04 regardless of domestic content; and vehicles such as motorcycles and mopeds under tariff heading 87.11, also regardless of domestic content.
- The sale of immovable properties owned by mazbut foundations that are managed and represented by the General Directorate of Foundations has been exempted from Value Added Tax (VAT).
- For fuels and lubricants imported under guarantee (List I of the Special Consumption Tax Law), the Special Consumption Tax amount used as the basis for calculating the guarantee has been added to the Value Added Tax (VAT) base.
- In inspection reports prepared by tax office inspectors, if coordinate-based location data and photographs of the inspection site are included and the report is prepared electronically, the signatures of the police, gendarmerie, village headman, or members of the village elders’ council will no longer be required.
- It has been explicitly stated that all kinds of tax and fee exemptions granted to the legal entity of Organized Industrial Zones do not include the Banking and Insurance Transactions Tax
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