Many joint stock companies operating in the field of international trade in Turkey, initiate necessary proceedings to acquire International Trading Company Status in order to benefit from its’ privileges and/incentives. Currently, sixty one (61) companies in 2019 were granted this status by Communique of International Trading Companies, published in the Official Gazette dated 19 July 2019 and numbered 30836.
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What is International Trading Company Status under Turkish Law?
Rules regarding to obtaining the status of “International Trading Company” were regulated under the Decree on Status of International Trading Company (Export: 2004/12) published in the Official Gazette dated 08/12/2004. The said status provides some privileges and incentives to qualified companies in tax, custom and government incentive programs.
According to such Decree, export companies shall satisfy some requirements to obtain the status of International Trading Company. These requirements are as follows;
- Companies have to be joint stock companies,
- Company shall have paid at least TRY 2 million shared in capital,
- Companies shall have exported 100 million Dollars or actual exports equivalent to this threshold according to the customs declaration in the previous calendar year.
- Companies shall have to duly apply to the Undersecretariat of Foreign Trade with the required documents until January for each year.
Status of International Trading Company is granted for one (1) year to the companies that are determined to have the necessary conditions as a result of the examination conducted by the Undersecretariat of Foreign Trade. This status pursuant to relevant tax and customs legislation helps companies to utilize some of the governmental promotions in the field of international trade.
Advantages of the international trading company status are as follows;
- Utilizing from the deferral- cancellation application in accordance with the relevant tax legislation for the export deliveries.
- Sufficiency of collateralizing 4% to retrieve the VAT of exports in the case of having a successful taxation term in last five (5) years,
- Being able to request VAT refunds even for less than TRY 4000 without receiving customs declaration confirmation,
- Gaining an opportunity to use credits from Eximbank, which applies lower interest rates than the interest rates applied in the market.
- Exemption from the conditions of recruiting a fixed number of employees and manufacturing to acquire customs approved operator status in accordance with the relevant customs legislation,
- Exemption from fulfilling the relevant export import performance criteria foreseen in accordance with the legislation,
- Utilizing primarily from various governmental assistance such as promotion and diversification of export products, escalating the market share and entering into new markets.