Turkey enacted Law No. 7590, cutting the nuclear investment thin capitalisation rate to 25%, exempting nuclear developers from VAT and stamp duty, establishing vehicle excise minimums of TRY 30,000 and TRY 100,000, and subsidising tourism operators at TRY 116.67 per employee day through December 2026.
Turkey has enacted Law No. 7590, introducing several tax measures, including reforms to the special consumption tax (SCT) on motor vehicles, new tax incentives for the nuclear energy sector, and an extension of employment support measures. The law entered into force upon its publication in the Official Gazette on 31 July 2026.
The legislation primarily targets tax exemptions for nuclear energy investments, establishes new minimum excise duty thresholds for motor vehicles, and extends social security employment incentives.
The key measures are as follows:
Nuclear energy incentives and taxation
The law provides significant financial and tax advantages for legal entities licensed to produce electricity at nuclear power plants:
- Machinery and equipment exemption: Machinery and equipment deliveries made to licensed nuclear energy developers under an investment incentive certificate are fully exempt from VAT until 31 December 2045. Incurred VAT on these transactions can be deducted or refunded.
- Thin capitalisation: For borrowings related to nuclear power plant investments, the standard 50% rate specified in the Corporate Tax Law is reduced to 25% until 2045.
VAT exemptions and refunds
- Construction VAT refunds: VAT paid on construction works that cannot be offset through standard deductions within six months of a calendar year will be refunded to the taxpayer. This refund must be requested within one year following the respective six-month period. This incentive is valid until 2045, though the President may extend it to 2050. These VAT changes took effect on 1 August 2026.
- Penalties for uncompleted projects: If a nuclear investment is not completed, any VAT that went uncollected or was refunded will be clawed back from the investor, accompanied by a tax loss penalty and delay interest.
These VAT relief changes took effect on 1 August 2026.
Stamp duty exemption
Effective 31 July 2026, papers and agreements drawn up in relation to nuclear power plant investments by licensed legal entities are added to Table No. 2 of the Stamp Duty Law No. 488, making them completely exempt from stamp duty. The stamp duty exemption applies from 31 July 2026 for an indefinite period.
Special consumption tax (SCT): Minimum lump-sum excise floor established
Law No. 7590 amends Article 12 of the Special Consumption Tax (SCT) Law No. 4760, establishing a minimum lump-sum tax floor for vehicles categorised under CN Code 87.03 (primarily passenger cars and other transport vehicles):
- For L-class vehicles (excluding internal combustion engine types and electric types with motor power under 4 kW), the minimum tax is set at TRY 30,000.
- For all other vehicles under CN Code 87.03 (excluding T-class vehicles), the minimum floor is set at TRY 100,000.
These amounts will be adjusted annually starting from the calendar year-end at the revaluation rate determined under the Tax Procedure Law No. 213, with fractional amounts under TRY 100.
The President may increase minimum lump-sum tax limits by up to 10 times or reduce them to zero, with a traction system added to the technical criteria for differentiating tax floors alongside factors such as engine power, battery capacity, and emissions. These SCT changes took effect on 31 July 2026.
Tourism sector premium support
Private-sector accommodation facilities holding a tourism operation certificate will receive temporary social security premium support from May to December 2026.
The support is calculated by multiplying the premium payment days of employees subject to long-term insurance branches by TRY 116.67.
The subsidy, funded by the Unemployment Insurance Fund, is credited directly against employers’ SGK premium liabilities and is excluded from corporate and income tax calculations.
The measure entered into force on 31 July 2026.
Cultural heritage fees
The Ministry of Culture and Tourism will now charge fees for various document requests and research services to fund the protection of cultural heritage.
