As published on 22.8.2009 in the Official Announcer of Turkey, two significant steps have been arranged by the Government now in order to encourage the Turkish Ensign for Turkish benefited yachts. According to a Cabinet Decision, the VAT has been fixed to 1% and the Luxury Consumption Tax has been put away with. Furthermore, according to the Undersecretary of Marine Affairs, yachts, acquired by Turkish beneficiaries prior to 30.6.2009, can be imported to Turkey now and will only be subjected to the 1% VAT. Both decisions are timely limited to 30.11.2009.

Both texts are still subject to some obscurities, which should be clarified once the relevant regulations are published. In particular, while the Cabinet Decision instructs clearly about VAT and the Luxury Consumption Tax, no clarification about the Customs Duty exist yet.

In an earlier step yachts had been removed as of 30.6.2009 from the scope of the heavy Motor Vehicles Tax, based on engine power, and only a very reasonable Annual Duty, based on vessel’s length, is levied now on the Turkish Ensign.

The incentives are well received, although the interested public seems to wait for the introduction of limits on a possible raise in time to the Annual Duty, as well.

It is to be expected that once the incentive has picked up, Turkish beneficiaries will be somewhat discouraged to maintain foreign flagged yachts in Turkey.