VAT Exemption on Machinery and Equipment Purchases
Before December 31, 2019 The VAT exemption period for new machinery and equipment procured exclusively for use in the manufacturing industry by taxpayers holding an Industrial Registration Certificate is as published in the Official Gazette dated 24/12/2019 and numbered 30988. Law No. 7201 on Amendments to the Expropriation Law and Certain Other Laws with 31/12/2022 It has been extended until [date].
List of Machinery and Equipment for which incentives are valid (Council of Ministers Decision No. 2018/11674 (as defined in Article 4) https://1drv.ms/b/s!AvA4x730lOhbgvlAzjP0xOH6Gbyw9Q You can access it via this link.
Who can benefit?
Taxpayers holding an Industrial Registry Certificate in accordance with Law No. 6948 on Industrial Registry can benefit from this provision for new machinery and equipment purchases made until 31/12/2022, exclusively for use in the manufacturing industry.
Relevant Legal Provisions
Incentive Scope
Relevant Law Articles
Temporary Article 39 of the Value Added Tax Law No. 3065
VAT Exemption for Machinery and Equipment
Article 8 of Law No. 7201 on Amendments to the Expropriation Law and Certain Other Laws
Temporary Article 39 of the Value Added Tax Law No. 3065
Deliveries of new machinery and equipment made exclusively for use in the manufacturing industry to value-added tax payers holding an industrial registration certificate in accordance with the Industrial Registration Law No. 6948 dated 17/4/1957, and deliveries of new machinery and equipment made exclusively for use in R&D, innovation and design activities to those engaged in R&D, innovation and design activities in technology development zones and specialized technology development zones within the scope of the Technology Development Zones Law No. 4691 dated 26/6/2001, in R&D and Design Centers within the scope of the Law on Supporting Research, Development and Design Activities No. 5746 dated 28/2/2008, and in research laboratories within the scope of the Law on Supporting Research Infrastructures No. 6550 dated 3/7/2014, are considered as tax breaks. 31/12/2022 It is exempt from value added tax until that date.
Taxes incurred due to deliveries made within this scope are deducted from the tax calculated on taxable transactions. Taxes that cannot be compensated through deduction are refunded upon the request of the taxpayer who carries out transactions within the scope of the exemption in accordance with the provisions of Article 32 of this Law.
If machinery and equipment acquired under the exemption are used or disposed of for purposes other than manufacturing or R&D, innovation, and design activities within three years from the beginning of the calendar year following the delivery date, the unpaid tax will be collected from the recipient along with a tax evasion penalty and late payment interest. The statute of limitations for unpaid taxes and tax penalties begins from the beginning of the calendar year following the date on which the situation requiring the assessment of the tax or the imposition of the penalty occurred.
The President is authorized to determine the machinery and equipment to be delivered under the exemption for use in the manufacturing industry and to extend the period specified in the first paragraph up to two years, while the Ministry of Finance is authorized to determine the procedures and principles for the implementation of this article.
