Includes information on average tariff rates and types that U.S. firms should be aware of when exporting to the market.
The EU and Turkey have been linked by a Customs Union agreement since 1995 and Turkey has been a candidate country to join the EU since 1999 and is a member of the Euro-Mediterranean Partnership.
Turkey applies the Customs Union Common External Tariff (CET) to industrial goods, and its Most-Favored Nation (MFN) tariffs for non-agricultural products are low, on average 5%. However, this relative openness is not reflected in Turkey’s WTO commitments as it has left 66% of its non-agricultural tariff lines unbound. Tariff protection is high for agricultural products. The Customs Union with the EU and free-trade agreements provide duty-free access for many of Turkey’s most important trading partners. In addition, Turkey has the possibility to open tariff-rate quotas for non-agricultural goods, its investment incentive programs provide for duty and tax concessions on imports, exporters benefit from an inward-processing scheme, and a “suspension list” enables manufacturers to import certain raw materials and intermediary inputs at low or duty-exempt rates.
During the COVID-19 pandemic, the Turkish Government increased import tariffs on approximately 4,000 products to up to 50% until the end of September 2020, after which tariffs are due to decrease, but for many, not back to the prior levels.
Customs surcharges include a value-added tax (VAT) levied on most imported, as well as 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 (basic food) ranges from 1% to 8% and can reach up to 18% for some 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.
Turkey typically relies on internal taxes on goods and services rather than trade taxes such as customs duties to raise government revenue. Together, VAT and SCT provide over half of the government’s revenue. In principle, Turkey’s VAT and the Special Consumption Tax (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 2018 saw a marked increase in import tariffs on certain U.S. alcohol products. 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 Turkey, including outright prohibitions, licensing, controls and restrictions. Eleven categories of goods require an import license and 26 require an export license. On the export side, Turkey adheres to international agreements for the prohibition or control of strategic goods and has provisions for export quality control checks of certain agricultural products.