Free Zones Establishment and Development Fund

Fund Account

Article 40- Accounts will be opened with the Central Bank of the Republic of Turkey, in Turkish Lira and U.S. Dollars or the foreign currency to enable the payments connected with the “Free Zones Establishment and Development Fund” established as per Article 7 of the Law to be made. In addition, Zone Directorates shall open Turkish Lira accounts and foreign exchange accounts in U.S. Dollars or other convertible currency, with the Ziraat Bank branch in the Zone, if there is one or otherwise with any public or private bank in order to provide for all payments realized in their Zones to be transferred to the central account within 5 working days.

Fund Revenues

Article 41- Fund revenues consists of the following items:

a). A payment of 0.05 per cent payable immediately on the FOB values of goods leaving the Zone and the CIF values of goods entering the Zone with the exception of goods brought into the Zone from Turkey, goods used at the investment and installation stages and equipment brought into the Zone for repair and maintenace purposes.

b). The “Operation Licence Application Fee” specified by General Directorate in conformity with Article 11, payable by those applying for an Operation Licence.

c). The annual Entry Permit fee of 10 U.S. dollars or the equivalent in Turkish Lira to be paid in case of the loss of this Permit or of a Special Entry Permit Document.

d). Other revenues specified in the Law, article 7, sub-paragraph (d), viz:

  1. Contributions to be levied on the banks and insurance companies in the Zone, in the amount of 0.5 % of their revenues arising from their activities in the Zone, that is, the money collected on their behalf in cash or on account as a result of all the transactions performed by them. The last date for payment of these contributions shall be the end of the working day on the 20th of January, April, July and October, in quarterly periods.
  2. Contributions to be levied on the Operator or the Z.F.O. in the amount of 4 per cent of their net monthly revenue arising from their operation or establishment and operation activities, as per the Operation or Establishment and Operation Contracts signed with these companies, and all other fees and revenues mentioned in these contracts.
  3. 90 per cent of the rent revenue arising when the areas rented by the Operator are subsequently rented to users and 63 per cent of the rental revenue when the areas are rented to the Z.F.O. are subsequently rented to users - to be paid by the Operator or the Z.F.O. by the end of working hours on the 20th day following the month in which the revenue in question is collected.The amounts of rent for plots that are rented to the users and have no buidings orfacilities installed on them are specified by the Operator or the Z.F.O. separately, for each Zone, and are announced to users after a top limit has been determined and approved by the General Directorate.
  4. 90 per cent of the rent collected by the Operator or the Z.F.O. when buildings and facilities are   constructed in the zone by or on behalf of the Regional directorate to be rented or transferred to  users and such buildings and facilities are rented out by the Operator or the Z.F.O. or when     buildings and facilities, the ownership of which is transferred to the State Treasury when their      Operation Licences expire, are rented out by the Operator or the Z.F.O. - to be paid on the 20th  day following the month in which the revenue in question is collected. 
  1. The fee in the amount of 0.05 per cent of the CIF value to be charged on goods, tools, materials  and equipment that are brought to the zone temporarily for reasons such as servicing, maintenace  and repair are not taken out in the period specified in Article 58, and the bond in the amount   specified in Article 58 in case of fixtures and investment goods of the kind described in paragraph  2 of the Article are taken out of the Zone for the same purpose and are not brought back within 12 months.Fees to be charged on goods that are brought into the Zone for reasons such as service, maintenace and repair and that are taken out in the period specified in Article 58, in the amount of 5 per cent of the value added arising from their servicing in the Zone.

e). The penalties, costs and interests specified in the Contract for cases when the Operator or the Z.F.O. or the users do not fulfill their obligations in due time or do not fulfill them at all, in contravention of the provisions of directives, written instructions and orders,the principles set out by the Undersecretariat or the Operation and Establishment or Operation Contracts and the provisions of the Regulation.

All the above payments are to be transferred to the Fund account.

The contributions specified in their contracts are not levied on revenues of the Operator or the Z.F.O. that arise from the renting of buildings and facilities constructed by them or on their behalf after they obtained a separate Operation Licence and opened separate account books or as a result of their setting up partnerships in organizations engaged in the activities which it is envisaged to be performed in the Zone.

Beside these revenues, the entire fee is reimbursed in cases when candidate users are refused Operation Licence although they have paid the Licence Fee or when the existence of the following circumstances is confirmed by the authorities and the General Directorate accepts that they constitute cases of Force Majeure:

- Natural disasters such as fires, earthquakes or floods that prevent operation,

- The prevention or prohibition of the execution of activity by a public authority,

- Cases when embargoes in international economic relations, quotas and/or other changes affect the economy in such a way as to prevent the activities from being carried out.

In cases other than these, when it is reported that the activity will not begin or that the activity is to be terminated and the reimbursement of the licence fee is requested, the entire fee paid shall be forfeited as revenue to the Fund.

The receipt given for payments to the Fund shall include detailed information such as the name and surname of the payer, the trade title of the user and the amount and type of the payment.

Revenues collected by the Zone Directorates shall be deposited with the Turkish Lira or foreign currency account, as appropriate, with the Central Bank of Turkey by the end of the working day following their collection and those paid to the bank branch specified in article 40 transferred to the account in question within 5 working days.

Collection of Fund Revenues and Reimbursements

Article 42- Fund Revenues that are not been paid or not fully paid shall be collected and excess amounts reimbursed in accordance with the following principles:

a) When it is found that amounts are to be paid into the Fund in conformity with the Law and the Regulations have not been paid at all or have only partially been paid, payment of the amount in question demanded of the user by written notice of the Zone Directorate within 3 years of the start of the event that generates the revenue. The Zone Directorate shall inform the user of the amount and obtain his signature on the document stating this amount. Written notice shall be served on those who avoid being informed of the amount and signing the document stating it.

b) Users may object to these demands by applying to the concerned Zone Directorate within fifteen days. Amounts to be paid to the Fund by those who declare that they have no objections in written form on the document stating the amount within this period shall be considered fixed as far as objections are concerned. Such amounts are to be paid within one month following the date of their becoming fixed.

c) Objections made by users will be examined by the Zone Directorate and a conclusion is reached within one month. The decision taken by the Zone Directorate in this respect shall be submitted to the General Directorate for approval. The said decision will be examined by the General Directorate and approved or rejected within one month. The decision so approved will then be communicated to the user by the Zone Directorate, the user retaining the right to object in Administrative Courts. The date of the serving of notice shall be taken to be the starting date of the period allowed for objection in Administrative Courts.

d) Those “Fund Revenues” that are found during the examinations and investigations performed by the General Directorate and/or the Zone Directorate to have been paid in amounts in excess of those dictated by the Law and Regulation shall be reimbursed within one year of the start date of the event that generates the revenue. Within this same period, users may request the reimbursement only of Fund Revenue that has been overpaid because of substantial calculation errors.

Pursuit of Fund Receivables, Penalties and Prescription

Article 43- Fund Revenues that are not paid and penalties in connection with these shall be followed up as per the provisions of the Code of the Execution and Bankruptcy.

If debts of the Fund are linked to an activity that calls for criminal action and the period for which lawsuits are allowed to continue in this connection is longer, then the periods allowed for the lawsuit and penalty under the Turkish Penal Code shall apply for such debts.

Fund Expenditures

Article 44- Zone Directorates shall submit their program proposals on revenue and expenditure estimates with regard to the following year to the General Directorate by the end of working hours on the 15th of July every year. The General Directorate shall plan the expenditures of the central organization by the same date and shall contact the Zone Directorates about the proposals sent by the Zones, complete the necessary revisions and submit them to the approval of the Minister to which the Undersecretariat is attached by the last week of August at the latest. Any transfer to be made between the Fund items thereafter shall come into effect upon the reapproval of the Undersecretariat.

The General Directorate and the Zones shall make expenditures within the framework of their budgets and the appropriations assigned to them. In central organization, the Minister concerned, the Undersecretary, the Deputy Undersecretary and the General Director shall be authorized to make the expenditures, depending on their size, and in the Zones the Zone Directors and the personnel authorized by them shall be authorized to make the expenditures, within the financial limits specified and approved by the Minister. The General Directorate is authorized to make expenditures and transfers where the total sum or ratio involved are laid down exactly by the Law, Decrees, Bye-Laws and Regulations.

Principles of Expenditure

Article 45- For expenditures to be made by the General Directorate, a request should first be received from the Department Head responsible by the Head of the Financial Affairs Department, and this demand should be submitted for the approval of the General Directorate through the Deputy Director General responsible for finance.

For the purchases to be made from the Fund by the General Directorate, the purchasing committee shall consist of the Department Head concerned with the expenditure, an official from the same department and an official of the department concerned with financial affairs under the chairmanship of the Deputy Director General in charge of financial matters. The decisions of the Purchasing Committee shall be submitted for the approval of the concerned authority, considering the expenditure limits mentioned in Article 44.

Expenditures to be made by the Zone Directorate are to be decided by a committee consisting of two officials, one from the financing department and the other from the accounts service, under the chairmanship of the Zone Director or the person authorized by him in his absence. The names of the personnel thus assigned with this task shall be submitted to the General Directorate one month before the beginning of each financial year.

The list of the personnel authorized to make expenditures on behalf of the Fund at the central and regional levels shall be submitted to the Central Bank of the Republic of Turkey by the General Directorate.

Amounts of cash held in the Fund with the Central Bank of the Republic of Turkey may be made profitable by the General Directorate by investing them in Treasury Bonds and Government Bills.