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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.