(TBMM) - With three new articles added to the Bill on Amendments to Certain Laws and Decree Laws, whose discussions were completed in the Grand National Assembly of Turkey Planning and Budget Commission, contracts and other investment documents related to nuclear power plant investments were exempted from stamp duty. While VAT exemption and refund application was introduced for construction works and machinery and equipment deliveries within the scope of investment, a change was also made in the corporate tax application for borrowings made within the scope of investment.
Three new articles containing tax regulations for nuclear power plant investments were added to the Bill on Amendments to Certain Laws and Decree Laws, whose discussions were completed in the Grand National Assembly of Turkey Planning and Budget Commission. With the proposals submitted and accepted by the AK Party, it is aimed to reduce the tax burden faced by investors who obtain an associate or license to engage in electrical energy production from nuclear power plants during the investment process, while tax advantages are provided for many transactions, from investment financing to purchases of goods and services.
With the new article added to the proposal, new regulations covering nuclear power plant investments were made in the Stamp Duty Law No. 488, Value Added Tax Law No. 3065 and Corporate Tax Law No. 5520.
With the proposal accepted in the commission, a new clause was added to the Stamp Tax Law No. 488. Accordingly, papers issued by legal entities that have a pre-license or license to engage in electrical energy production from nuclear power plants and related to nuclear power plant investments will be exempt from stamp duty.
The regulation covers not only the transactions of the investor companies themselves, but also the documents drawn up between public institutions and private law legal entities within the scope of the nuclear power plant investment. In this context, purchases of goods and services related to the investment process, investment loan transactions and other documents issued for the realization of the investment can be issued without paying stamp duty.
According to another article added to the proposal, to be implemented until December 31, 2045, the value added tax that taxpayers who received a pre-license or license for the production of electrical energy from nuclear power plants, incurred due to the construction works related to nuclear power plant investments within the scope of the investment incentive certificate and could not compensate through deductions, will be refunded to the investor.
The refund application will cover the VAT that cannot be eliminated through deduction as of the six-month periods of the calendar year. Taxpayers will be able to get these taxes back if they apply within one year following the said periods.
With the same article, deliveries of machinery and equipment to be used in nuclear power plant investments to be carried out within the scope of the investment incentive certificate are also exempt from VAT. The value added tax that the sellers bear due to these deliveries, but cannot compensate through discounts, will also be refunded if requested.
Thus, it is aimed to reduce the investment costs of investors and to alleviate the tax burden of the machinery and equipment to be used in the investment process.
The said article also regulated the sanctions to be applied in case the investment is not completed. Accordingly, taxes that are not collected on time or returned to the investor within the scope of the regulation will be collected along with delay interest by applying a tax loss penalty. In addition, while the President was given the authority to extend the implementation period of VAT incentives until December 31, 2050, the authority to determine the procedures and principles regarding the implementation was left to the Ministry of Treasury and Finance.
TAX ADVANTAGE FOR FINANCING IN CORPORATE TAX
With another third article accepted by the commission, the 50 percent rate in the second paragraph of the 12th article of the Corporate Tax Law on disguised capital will be applied as 25 percent until December 31, 2045, in the borrowings made within the scope of investment by institutions that have a pre-license or license for the purpose of producing electrical energy from nuclear power plants.
While the regulation aims to reduce the financing burden of investors in nuclear power plant projects with long investment periods and high financing needs, the President was given the authority to extend the duration of this application for up to five years.