Türkiye applies the common external tariff (CET) to industrial goods, and its most-favored nation (MFN) tariffs on non-agricultural products on average of 5%. Tariff protection is high for agricultural products, though the customs union with the EU and various free-trade agreements provide duty-free access for many of Türkiye’s largest trading partners. Since late 2020, however, high tariffs on certain agricultural bulk commodities like wheat, corn, barley, and sunflower seed oil, have been eliminated to address major food inflation and commodity cost increases. In addition, Türkiye’s investment incentive programs provide for duty and tax concessions on imports commonly used by exporters. A “suspension list” enables manufacturers to import certain raw materials and intermediary inputs at low or duty-exempt rates.
Customs surcharges include a value-added tax (VAT) levied on most imported and domestic goods and services. The importer is responsible for paying VAT. VAT is calculated on a cost insurance freight (CIF) basis plus duty rate and any other applicable charges levied before the goods clear customs. VAT for most agricultural products ranges from 1% to 10% but may be as high as 20% for certain processed products. Capital goods, some raw materials, imports by government agencies and state-owned enterprises, and products for investments with incentive certificates are exempt from import fees.
Türkiye relies primarily on internal taxes rather than trade taxes such as customs duties to raise government revenue. Together, VAT and special consumption tax (SCT) provide over half of the government’s revenue. In principle, Türkiye’s VAT and SCT make no distinction between imported and domestically produced goods. However, the SCT on alcoholic beverages varies considerably depending on the type of product, and all alcohol is taxed at an extremely high rate, with regular review for possible increases every six months. Since 2018, U.S. spirits and liquors face an additional 70% tariff. Overall, the tax system has the potential to favor the consumption of some products relative to others. Other products impacted by the SCT include petroleum products, motor vehicles, aircraft, vessels, and durable consumer goods.
Both imports and exports are subject to certain border measures in Türkiye, including outright prohibitions, licensing, controls, and restrictions. Several categories of goods require import and/or export licenses subject to change based on market conditions. On the export side, Türkiye adheres to international agreements for the prohibition or control of strategic goods and has implemented export quality control checks of certain agricultural products.