What is an Investment Incentive Certificate and What Are Its Processes?

What is an Investment Incentive Certificate?

The investment incentive certificate is a support mechanism provided by the government to ease investments and reduce costs for businesses. The investment incentive system can be utilized for a wide range of purposes, from new investments to product diversification.

This certificate is not limited to the acquisition of machinery or equipment; it also offers significant convenience in areas such as IT infrastructure, construction projects, and the improvement of internal company processes. With proper planning, businesses can maximize the benefits provided by the investment incentive certificate.

Benefits of an Investment Incentive Certificate

1. VAT Exemption: 
   With an investment incentive certificate, businesses are exempt from paying VAT on machinery, equipment, or construction materials procured for investments. This offers substantial cost advantages, especially for large-scale investments.
2. Customs Duty Exemption: 
   No additional or standard customs duties are payable on products imported from abroad. This makes import processes both more economical and faster.
3. Income Tax Reduction: 
   Depending on the investment amount, businesses' income tax burden is reduced. For example, a business making a 5 million TRY investment can benefit from income tax exemptions up to this amount.
4. Interest Support: 
   The investment incentive certificate enables interest rate reductions on investment loans. Depending on the loan used, long-term financing with low-interest rates can be secured.
5. Social Security Premium (SGK) Reduction: 
   After the investment is completed, reductions are applied to employee and employer SGK premiums. Although region-based differences exist, this support reduces businesses’ long-term costs.
6. Access to Investment Loans: 
   A well-prepared investment incentive certificate facilitates access to investment loans with low interest rates and flexible repayment plans. This helps ease the financial burden on businesses.

Important Points About the Investment Incentive Certificate

• Proper preparation of declarations and realistic presentation of profitability ratios are key to fully benefiting from the incentives.
• To effectively utilize tax and other supports, the investment plan must be professionally prepared.
• The certificate is not only limited to machinery and equipment purchases; it has a broad scope of use in areas such as construction projects, land acquisitions, and IT infrastructure.