Turkey's wealthiest individuals have historically registered
their private vessels in the countries where a tax exemption is
available. There are also a plenty of private vessels used in
Turkish coastal waters that carry a foreign country's flag.
Also, in some cases, wealthy people establish a foreign
entity that holds private vessels in their books but these are
actually for the personal use of Turkish citizens.
The main reason for such a practice is to benefit from
certain tax exemptions, like the special consumption tax
exemption on fuel purchases and motor vehicles tax exemption
for foreign flags applied in Turkey. By doing so, substantial
amounts of VAT and/or special consumption tax can also be
As this is a well-known fact, the Turkish government has
decided to change its policy and has recently put into effect
new regulations to attract the registration of private vessels
In this regard, Law No. 6670 introduced tax exemptions for
private vessels registered abroad or carrying a foreign flag.
This Law aims to stimulate such vessels to carry a Turkish flag
and enables all sort of tax exemptions if they are imported and
registered in Turkey.
Based on these facts, to benefit from tax exemption, a
private vessel should meet the following conditions:
- Be registered abroad or carry a foreign
- Be imported and registered in Turkey.
Which private vessels are covered by the Law?
The Law provides tax exemptions for private yachts,
cruisers, boats, and excursion ships registered abroad or
carrying a foreign flag.
The Law covers the private vessels categorised in the GTIP
numbers of 8901.10.10.00.11, 8901.10.90.00.11 and 89.03 under
Turkish customs tariff schedule as of January 27 2017.
The scope of tax exemption
In case private vessels are transferred free of charge to
individuals or corporates resident in Turkey, such a
transaction will be exempted from all taxes and duties
including inheritance and transfer tax and customs duties.
However, there is an exception for the exemption. In terms
of such transactions, there will only be a single duty to be
paid, which is a licence fee at registry. For 2017, licence
fees at registration that apply to private vessels are as
|From 5-9 metres
|From 9-12 metres
|From 12-20 metres
|From 20-30 metres
|Larger than 30
If individuals or corporates pay these low license fees they
will be able to raise the Turkish flag without any other taxes
No investigation or tax penalty will be applicable
For undeclared private vessels, the Law assures that there
will be no investigations or tax penalties for the earlier
periods for those who imported or registered these vessels in
All investigations being currently carried out will be also
abolished. In the same way, if a court case opened against a
tax assessment before the introduction of the Law, such
assessments will be also cancelled by the tax office provided
that the plaintiff withdraws the open court case. However, the
tax office will not refund the paid taxes due to earlier
In conclusion, we believe that it is a good opportunity for
individuals and corporates resident in Turkey to import or
transfer their private vessels abroad or those carrying a
foreign flag without paying any taxes and duties.
Burçin Gözlüklü (firstname.lastname@example.org)
and Ramazan Biçer (email@example.com)
Tel: +90 216 504 20 66 and +90 216 504 20 66