How to Save Money on Import Duties in Turkey: A Guide for Businesses
If you are a business owner who wants to import goods into Turkey, you might be wondering how to reduce the costs of import duties and taxes. Importing goods into Turkey can be a complex and expensive process, depending on the type, value, and origin of the goods. In this article, we will explain the main factors that affect the import duties and taxes in Turkey, and provide some tips on how to save money on them.
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Import Duties and Taxes in Turkey
According to the International Trade Administration, Turkey applies the Common External Tariff (CET) to industrial goods, and its Most-Favored Nation (MFN) tariffs on non-agricultural products on average of 5%. However, tariff protection is high for agricultural products, ranging from 40% to 200%. Turkey also has free trade agreements with many countries, such as the EU, EFTA, Israel, Korea, Malaysia, and Singapore, that provide duty-free access for certain products.
In addition to tariffs, imported goods are subject to other taxes and fees, such as:
- Value-added tax (VAT): This is a tax levied on most imported and domestic goods and services. The importer is responsible for paying VAT, which is calculated on a Cost Insurance Freight (CIF) basis plus duty rate and any other applicable charges. VAT for most agricultural products ranges from 1% to 8%, but may be as high as 18% for certain processed products.
- Special consumption tax (SCT): This is a tax imposed on some imported and domestic goods that are considered luxury or harmful to health or environment. The SCT rates vary depending on the product category and can be as high as 160% for alcoholic beverages, 130% for motor vehicles, and 63% for tobacco products.
- TAREKS: This is a fee charged by the Ministry of Trade for the inspection and control of certain imported goods that are subject to technical regulations or standards. The TAREKS fee ranges from 0.1% to 1% of the CIF value of the goods.
- Banderol fees: These are fees applied to some imported goods that require banderol labels to prevent smuggling and tax evasion. The banderol fees range from 2% to 8% of the CIF value of the goods.
- Cultural fund: This is a fee collected by the Ministry of Culture and Tourism for the promotion of Turkish culture and arts. The cultural fund fee ranges from 0.4% to 2% of the CIF value of the goods.
Tips on How to Save Money on Import Duties and Taxes in Turkey
As you can see, importing goods into Turkey can involve many costs that can affect your profit margin. However, there are some ways to reduce or avoid these costs, such as:
- Choose products that have lower or zero tariffs: You can check the tariff rates for different products using the Customs Info Database or the Turkish Tariff Finder. You can also consult with your supplier or freight forwarder to find out if there are any preferential trade agreements or tariff quotas that apply to your products.
- Choose products that have lower or zero VAT or SCT: You can check the VAT and SCT rates for different products using the General Communiqué on Value Added Tax or the General Communiqué on Special Consumption Tax. You can also look for products that are exempt from VAT or SCT, such as capital goods, raw materials, imports by government agencies or state-owned enterprises, and products for investments with incentive certificates.
- Choose products that do not require TAREKS, banderol fees, or cultural fund: You can check if your products are subject to these fees using the Import Regime Decree or the Ministry of Trade website. You can also look for products that are exempt from these fees, such as personal effects, samples, gifts, humanitarian aid, and diplomatic goods.
- Choose a reliable supplier and freight forwarder: You can save money by working with a supplier who can provide accurate and complete documentation for your products, such as invoices, certificates of origin, certificates of conformity, packing lists, etc. You can also work with a freight forwarder who can handle the customs clearance process efficiently and advise you on the best shipping options and routes.
- Apply for an import license or authorization: For some products, you may need an import license or authorization from the relevant authorities before you can import them into Turkey. You can check if your products require an import license or authorization using the Import Regime Decree or the Ministry of Trade website. You can also apply for an import license or authorization online using the Electronic Application System.
Importing goods into Turkey can be a lucrative business opportunity if you know how to reduce the costs of import duties and taxes. By following the tips above, you can save money and increase your profit margin. However, you should also be aware of the legal and regulatory requirements and risks involved in importing goods into Turkey and seek professional advice if needed.
The Impact of Import Duties on Turkey’s Trade
Turkey is a country that has a dynamic and diversified economy, with a strong industrial base and a large domestic market. Turkey is also a member of the Customs Union with the European Union (EU), which means that it applies the same tariffs as the EU for most industrial goods. However, Turkey also has its own import regime, which includes various taxes and fees that affect the cost and competitiveness of imported goods. In this blog post, we will examine some of the main aspects of Turkey’s import regime and how they influence its trade performance and relations with other countries.
VAT and Customs Duty
One of the most common taxes that importers have to pay in Turkey is the value-added tax (VAT), which is levied on most imported and domestic goods and services. The VAT rate in Turkey is generally 20%, but it may vary depending on the type and origin of the product. For example, VAT for most agricultural products ranges from 1% to 8%, but it may be as high as 18% for certain processed products . The VAT is calculated on a cost insurance freight (CIF) basis plus duty rate and any other applicable charges levied before the goods clear customs . The importer is responsible for paying the VAT to the customs authorities.
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Another tax that importers have to pay in Turkey is the customs duty, which is determined by the Import Regime Decree, which is published by the Ministry of Economy every year. The Import Regime Decree lists the tariff rates and types that apply to different categories of goods, based on their harmonized system (HS) codes. Turkey applies the common external tariff (CET) of the EU to industrial goods, which means that its most-favored nation (MFN) tariffs on non-agricultural products are on average 5% . However, Turkey has some exceptions and deviations from the CET, such as higher tariffs for certain agricultural products, textiles, clothing, footwear, iron and steel products, and vehicles . Moreover, Turkey has signed various free trade agreements (FTAs) with other countries and regions, which provide duty-free access or preferential rates for some products .
Special Consumption Tax and Other Fees
In addition to VAT and customs duty, some imported goods are subject to a special consumption tax (SCT), which is a type of excise tax that aims to discourage the consumption of certain products that have negative effects on health, environment, or social welfare. The SCT applies to petroleum products, motor vehicles, aircraft, vessels, alcoholic beverages, tobacco products, and durable consumer goods . The SCT rates vary depending on the type and characteristics of the product, such as engine size, fuel type, alcohol content, etc. For example, the SCT on alcoholic beverages ranges from 63% to 400%, depending on the product category. Since 2018, U.S. spirits and liquors face an additional 70% tariff in Turkey .
Besides these taxes, there are also some other fees that importers have to pay in Turkey, such as:
- TAREKS: This is a fee that covers the costs of inspection and testing of certain products that are subject to technical regulations or standards in Turkey. The TAREKS fee varies depending on the product type and value.
- Banderol fees: These are fees that apply to some products that are subject to price controls or anti-smuggling measures in Turkey, such as alcoholic beverages, tobacco products, pharmaceuticals, cosmetics, etc. The banderol fees range from 2% to 8% of the product value.
- Cultural Fund: This is a fee that supports the development of culture and arts in Turkey. It applies to some imported products that are related to culture and arts, such as books, magazines, newspapers, CDs, DVDs, etc. The cultural fund fee ranges from 0.4% to 2% of the product value.
The Effect of Import Duties on Turkey’s Trade
The import duties that apply in Turkey have a significant impact on its trade performance and relations with other countries. On one hand, these duties can increase the government revenue and protect the domestic producers from foreign competition. On the other hand, they can also increase the cost and reduce the availability of imported goods for consumers and businesses in Turkey. Moreover, they can create trade barriers and disputes with other countries that may affect Turkey’s access to foreign markets.
According to the World Bank data , Turkey’s total imports amounted to $219 billion in 2020, which was a decrease of 6% compared to 2019. The main import partners of Turkey were China, Germany, Russia, the United States, and Italy. The main import products of Turkey were machinery and equipment, mineral fuels and oils, electrical machinery and equipment, vehicles, and iron and steel. The average applied MFN tariff rate of Turkey was 5.2% in 2019, which was higher than the world average of 3.1%. The highest tariff rates of Turkey were applied to dairy products (42.7%), beverages and tobacco (34.4%), and animal products (25.8%).
The import duties that Turkey imposes on some products can affect its trade relations with other countries, especially with the EU and the U.S., which are its major trading partners. For example, Turkey has been involved in several trade disputes with the EU over issues such as steel tariffs, agricultural subsidies, textile quotas, etc. . Similarly, Turkey has faced trade tensions with the U.S. over issues such as steel and aluminum tariffs, sanctions, currency devaluation, etc. . These disputes can harm the trade flows and the economic cooperation between Turkey and these countries.
Turkey is a country that has a complex and dynamic import regime, which includes various taxes and fees that affect the cost and competitiveness of imported goods. These import duties can have both positive and negative effects on Turkey’s trade performance and relations with other countries. Therefore, it is important for importers to be aware of the import duties that apply in Turkey and to comply with the customs regulations and procedures.
Turkey – Import Tariffs – International Trade Administration
Republic of Türkiye – Ministry of Trade
How to Calculate Import Duties and Taxes to Turkey — Ikamet
World Bank Open Data | Data
EU-Turkey trade disputes: A long history | Bruegel
Turkey-U.S. Trade Tensions: What’s at Stake? | Center for Strategic …
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