Below you can find the answers to all frequently asked questions about the Inward Processing Regime, one of the most important incentive mechanisms for exporting companies.
IPR is a foreign trade regime that allows firms based in Turkey to import raw materials, auxiliary materials, or intermediate goods from abroad exempt from taxes such as customs duty, VAT, and SCT, in return for an export commitment. Its main purpose is to increase exports and competitiveness in international markets.
IPRC is a more comprehensive official document issued by the Ministry of Trade, usually applied for via E-TUYS. IPRP is an authorization given by customs administrations for simpler and short-term procedures.
It is the use of other goods in free circulation (domestic or imported) that have the same quality and technical characteristics as the goods to be imported, allowing for production and export before the importation takes place. This shortens the supply time. It is mandatory for the equivalent goods to match the imported goods at a minimum 8 or 12-digit HS Code level.
These are auxiliary materials that are not part of the exported product but are necessary for its production (excluding energy/fuel). Their value cannot exceed 2% of the export commitment.
It is the procurement of inputs for the product to be exported under the IPRC from within the country instead of importing them, by applying the VAT postponement-cancellation system. These purchases are also considered as imports.
One of two main systems is chosen:
| System | Operation |
|---|---|
| Conditional Exemption System | Taxes are secured by a guarantee during importation. The guarantee is released after the export commitment is fulfilled. It is the most commonly used system. |
| Drawback System | Goods are imported with taxes paid. When the product manufactured from these goods is exported, the paid taxes are refunded. |
In the Conditional Exemption System, the taxes arising from importation are secured by a guarantee. Cash, bank guarantee letters, or Treasury bonds are accepted as guarantees.
Firms with an Authorized Economic Operator (AEO) certificate or an Approved Person Status Certificate (APSC) can deposit a much lower rate of guarantee, such as 1%, 5%, or 10%, based on their past export performance.
This is the tax that must be paid for a third-country origin input imported under the conditional exemption, when the product manufactured from that input is exported to EU countries with an A.TR Movement Certificate. It is paid at the time of export.
Yes. A portion of the deposited guarantee can be released in proportion to the amount of export realized, before the project is closed. However, this is not possible for those who benefit from the reduced security deposit application.
The Inward Processing Regime Certificate (IPRC) is issued by the Ministry of Trade, while the Inward Processing Regime Permit (IPRP) is issued by Customs Administrations in certain cases. Factors such as the availability, price, and quality of the goods domestically are evaluated.
Yes. An extension can be requested within 3 months of the certificate's expiry date, based on just causes (force majeure, performance, etc.). If at least 25% of the export commitment has been met, an extension of half the certificate's duration can be granted.
The import and export transactions carried out within the certificate's period are finalized by submitting a closing application with the relevant customs declarations and other documents. If the commitment is fulfilled, the guarantees are released.
Yes. A product under the IPR can be temporarily sent abroad or to free zones for further processing. When re-imported, tax is paid only on the value-added abroad.
Yes. The certificate holder can export through an intermediary exporter. In this case, information for both firms must be included on the customs declaration.
Yes. The certificate holder can import through a representative (e.g., customs broker). It is mandatory for the certificate holder's information to be on the customs declaration.
If the export commitment for the imported goods is not fulfilled, the uncollected taxes during importation are reclaimed with punitive interest.
In case of non-compliance with the obligations, the taxes corresponding to the export shortfall are reclaimed. In case of irregularities, a penalty is applied in accordance with the relevant articles of Customs Law No. 4458.
Losing the certificate does not eliminate the rights and obligations. In case of loss of goods due to force majeure such as fire or flood, a request for evidence determination should be made to the court and an application should be made to the Ministry.
If the commitment closing procedure has been completed for a product that is returned for any reason, this procedure can be reversed. Re-importation of the product without paying import taxes may be allowed under certain conditions.