June 1, 2004 |
By
Keith Martin in Washington, DC
Turkey is considering new tax holidays as an inducement to foreigners to invest in the country.
A committee with representatives from the Ministry of Finance and the Tax Council (which is an independent panel of tax experts) is working on a proposal to present to parliament. The proposal is that there should be a 10-year holiday from income taxes for investments of more than €150 million. In years 11 through 15, earnings from such investments would be taxed at only half the normal income tax rate. The corporate tax rate is currently 33%.
Investments of at least €100 would receive a 7-year tax holiday. The tax holiday for investments of at least €50 would be five years. Companies will be required to hire at least a minimum number of employees. Improvements to existing facilities will benefit from the new tax holidays on 40% of revenues.
Mustafa Uysal, head of the Tax Council, said the government hopes to put the new law through parliament this year, ideally before the parliament leaves on holiday in August.
