Legislative proposal containing regulations on SCT submitted to Parliament: 'Can be changed by Presidential decree'

The legislative proposal for the Amendment of the Law on the Protection of the Value of Turkish Currency and Certain Other Laws, which bears the signatures of AKP deputies and has been submitted to the Speaker of the Grand National Assembly of Turkey (TBMM), also includes amendments to the Law on Technology Development Zones.

Accordingly, until December 31, 2028, for R&D, design, and support personnel working in the zone, the portion of their income tax calculated on their gross wages—not exceeding 40 times the gross minimum wage—remaining after deducting the tax corresponding to the minimum wage exemption regulated in the relevant provision of the Income Tax Law, will be deducted from the tax accrued on the withholding tax return and cancelled. Paperwork issued regarding wages within this scope will be exempt from stamp duty for the portion not exceeding 40 times the gross minimum wage. This provision will enter into force at the beginning of the month following the publication of the regulation.

According to the amendment made to the Law on Industrial Zones, the Ministry of Industry and Technology will decide on the addition of new areas to industrial zones or the removal of areas from them, and the decision regarding this will be published in the Official Gazette.

According to the regulation made in the Special Consumption Tax Law, the first acquisition of goods included in List II of the Law—which have a domestic contribution rate of at least 40 percent—as well as motor vehicles intended for the transport of goods, motorcycles including mopeds, and wheeled vehicles with an auxiliary motor, will be exempt from tax when acquired by the Ministry of National Defense, the Ministry of Interior, the Presidency of Defense Industries, and the National Intelligence Organization (MİT) exclusively for national defense and internal security needs.

The President will be authorized to increase the rates for goods in List II of the Law and the lower and upper limits of the Special Consumption Tax (SCT) bases underlying these rates by up to 3 times, or reduce them to zero; and, provided they remain within these limits, to determine different rates based on engine cylinder volume, range, and battery capacity for passenger cars and other motor vehicles, including station wagons and racing cars manufactured primarily for transporting people.

Changes are being made to the SCT base thresholds and rates for certain fossil-fuel passenger cars and some hybrid cars that use both fossil fuels and electric motors. Accordingly, the SCT rates to be applied based on engine cylinder volume and electric motor power will range between 80 percent and 220 percent.

For pickup-type vehicles that fall into the off-road vehicle class and have a maximum load mass not exceeding 3,500 kilograms, the SCT rate will be applied at 50 percent.

Within the scope of the amendment made to the Law on the Amendment of the Liquefied Petroleum Gases (LPG) Market Law and the Electricity Market Law, distributors will be able to purchase LPG from any distributor within the scope of wholesale LPG trade, but will not be able to sell this LPG to another distributor.

In a statement made on his social media account, journalist Emre Özpeynirci stated that with the new legislative proposal regarding the SCT, a law will no longer be required for SCT changes on automobiles. Özpeynirci said that if the new legislative proposal enters into force, the SCT could be changed by Presidential decree.

Özpeynirci's social media post is as follows:

"SCT on automobiles may change from scratch

In the legislative proposal submitted to Parliament by the AK Party, articles 14 and 15, which concern the AUTOMOTIVE sector, are summarized as follows;

From now on, a law will not be required for SCT changes on automobiles. Until today, changes could only be made to the lower and upper limits determined for tax bases (pre-tax price) by Presidential decree. From now on, the SCT can be changed as desired and at any time according to any feature by Presidential decree. (Such as tax base, engine cylinder volume, range, battery capacity, etc.)

Since the tax base (pre-tax price) limits have not been updated for the last 3 years, there were no automobiles left in the 45-50-60 and 70 percent SCT brackets (internal combustion). Theoretically, they continue to exist. But in practice, there are none outside of 80 percent.

The lowest SCT on hybrid automobiles has risen to 80 percent, and those at 130 percent have risen to 150 percent.

Final note: A proposal for an SCT increase has also been submitted for pick-up trucks with a maximum loaded capacity not exceeding 3,500 kg. In that case, the SCT rate appears to have increased from a range of 4-15 percent to 50 percent.

These are what I have been able to understand...

Open to interpretation and further developments"