By News Centre

Türkiye’s ruling Justice and Development Party
(AK Party) has introduced four new amendments to a 30-article
omnibus economic bill currently under deliberation in the Grand
National Assembly’s Planning and Budget Commission. The
legislation, which already includes a proposal to raise the minimum
pension to 23,552 Turkish lira, has now been expanded to provide
substantial tax incentives aimed at accelerating the country’s
nuclear energy investments.

The newly added provisions are designed to reduce the financial
burden on companies developing nuclear power plants by introducing
a range of tax exemptions and financing advantages throughout the
investment process.

Under the proposed amendments, companies that obtain a
preliminary license or a full operating license to generate
electricity from nuclear power plants will be exempt from paying
Stamp Duty on documents prepared during the investment phase. As a
result, documents related to transactions with public institutions,
the procurement of goods and services, financing arrangements, and
investment loans undertaken as part of nuclear power projects will
no longer be subject to the tax.

The bill also introduces a temporary amendment to Türkiye’s
Value Added Tax (VAT) Law, offering significant tax benefits for
nuclear power plant investments carried out under an investment
incentive certificate. Under the proposal, investors will be
eligible to receive refunds for VAT incurred on construction work
related to eligible projects through December 31, 2045, provided
that the tax cannot be recovered through standard deduction
mechanisms and that refund claims are submitted within the
prescribed time limits.

In addition, deliveries of machinery and equipment to be used in
qualifying nuclear power plant projects will be exempt from VAT
until the same date. VAT paid on such deliveries that cannot
otherwise be deducted will also be refundable upon the taxpayer’s
request.

However, the legislation includes safeguards to prevent abuse of
these incentives. If a nuclear investment project is ultimately not
completed, any taxes that were exempted or refunded under the
incentive program will be collected retroactively together with tax
loss penalties and late payment interest.

The proposal also grants the President the authority to extend
the validity of these VAT incentives until December 31, 2050,
providing flexibility to continue supporting long-term nuclear
investment projects.

The omnibus bill further amends Türkiye’s Corporate Tax Law to
facilitate financing for nuclear energy investments. According to
the proposed temporary provision, the thin capitalization ratio
applied to borrowings obtained by licensed nuclear energy companies
from banks and other financial institutions will be reduced from
50% to 25% through December 31, 2045.

The measure applies only to loans obtained from banks and
similar credit institutions and excludes financing provided by
related-party companies. The President will also have the authority
to extend this financing incentive for an additional five
years.

The scale of the proposed tax incentives is considerable. Using
the Akkuyu Nuclear Power Plant, whose total investment value is
estimated at approximately $25 billion, as a benchmark, analysts
estimate that VAT exemptions and refunds alone could amount to
between 125 billion and 140 billion Turkish lira over the course of
the project.

When the Stamp Duty exemption and the corporate tax financing
advantages are included, the total value of tax incentives for a
single nuclear power plant could reach approximately 130 billion to
150 billion Turkish lira.

Assuming similar investment costs and current price levels, the
cumulative tax incentives for multiple nuclear power projects could
theoretically exceed 500 billion to 600 billion Turkish lira,
underscoring the Turkish government’s commitment to expanding its
nuclear energy capacity through extensive fiscal support.