15/05/2023

State aid programs in Turkey

state aid turkey

Turkish government has implemented various state aid programs aimed at helping businesses in Turkey.

State aid is defined as financial support provided by governments to businesses that aim to stimulate economic growth and help businesses overcome difficulties. In Turkey, state aid is regulated by the Turkish Competition Authority (TCA) and is subject to strict rules and regulations.

One of the most notable state aid programs in Turkey is the Investment Incentive Program. This program aims to encourage investments in specific regions and sectors of the country by offering various tax exemptions, customs duty exemptions, and other financial incentives to businesses that invest in these regions and sectors.

Under the Investment Incentive Program, businesses that invest in priority sectors such as manufacturing, healthcare, and renewable energy can benefit from reduced corporate tax rates, social security premium supports, and various other financial incentives. Additionally, businesses that invest in certain regions of the country can receive additional support such as land allocation and infrastructure investments.

Another state aid program in Turkey is the Research and Development (R&D) and Innovation Support Program. This program aims to encourage businesses to invest in R&D and innovation activities by offering financial support in the form of grants and tax exemptions.

Businesses that undertake R&D and innovation activities can benefit from a range of incentives such as grants for R&D projects, tax exemptions for R&D investments, and preferential loan rates for innovation projects. Additionally, businesses that invest in R&D and innovation activities can also benefit from intellectual property rights protection and access to research facilities and expertise.

Furthermore, the Turkish government has also implemented various state aid programs aimed at supporting small and medium-sized enterprises (SMEs). These programs provide financial and non-financial support to SMEs, including funding for investments, technical assistance, and access to markets.

One such program is the SME Development and Support Program, which provides financial and technical support to SMEs in the form of grants, loans, and technical assistance. The program aims to improve the competitiveness of SMEs by supporting their growth and expansion.

In addition to the above programs, the Turkish government has also implemented state aid measures to support businesses affected by the COVID-19 pandemic. These measures include various financial and tax incentives, such as reduced VAT rates, tax payment extensions, and cash support for businesses.

However, it is important to note that state aid programs in Turkey are subject to strict rules and regulations, and businesses must meet certain criteria to be eligible for support. For example, businesses must comply with competition law and must demonstrate that the state aid will contribute to the overall economic development of the country.

In addition, businesses must also demonstrate that they are capable of using the state aid effectively and efficiently. The TCA closely monitors state aid programs to ensure that they are in line with competition law and that they contribute to the overall economic development of the country.

In conclusion, state aid programs in Turkey play a vital role in supporting businesses and industries in the country. These programs offer various financial and non-financial incentives to businesses that invest in priority sectors and regions, undertake R&D and innovation activities, and support SMEs. While these programs are subject to strict rules and regulations, they provide valuable support to businesses and contribute to the overall economic development of the country.