Akfen Holding Board of Directors Advisor Oktay Ugur evaluated the tax advantage that inextricably concerns the investors for Strategy Magazine. An important tax advantage that is designed for the big scale projects/investments that require advanced technology and high level financing which are principally under the government’s responsibility and that aims to speed up the realizations in these projects and to lower the financing costs inextricably concerns the investors. Therefore, we will broadly discuss the subject in this article. Within this context, in accordance with the Provisional Clause 29 that has been added to the Value Added Tax (VAT) Law with the Article 1 of the Act 6288 and that has come into effect on tha date 4th April 2012, the deliveries and service discharges that are made within the investment period and within the scope of the project to those who are entrusted at the projects or those who undertake the projects of which the tender or the entrusting notice will be issued by the date 31st December 2023, are exempt from value added tax. The projects, of which the tender or the entrustment have been issued before the article has come into effect and in the event that applications are made within 3 months from the date this act comes into effect, also benefit from this exemption as of the date the article comes into effect. The projects that will benefit the Value Added Tax (VAT) exemption are as follows: projects that will be implemented within the context of build-operate-transfer model in accordance with the Act 3996 regarding the Enforcement of Execution of Some Investments and Services within the Context of Build-Operate-Transfer Model, projects related to the health facilities that are decided to be built on a Build- Lease-Transfer basis by the Supreme Planning Council according to the collateral clause 7 of the Health Services Primary Act 3359 (re-regulated as of February 21st 2013 and with the Act 6428), projects related to the education facilities decided by the Ministry of Education to be built on a Build-Lease-Transfer basis according to the Article 23 of the Decree Law 652 relating to the Organization and Duties of the Republic of Turkey Ministry of National Education. Announcements regarding the implementation of exemption applications have been made with Value Added Tax (VAT) General Communique 118 and 120 that have been issued later on. According to this, relating to the above mentioned projects; the pursuits within the scope of the projects that have been put out to tender, the deliveries and services to the entrusted or those who undertake the Project within the investment period will be exempt from Value Added Tax (VAT). The investment period will be determined according to the written agreement made with the related institution concerning the projects in question. Exemptions will be applied to the deliveries and services to the prime contractors that undertake the above mentioned projects and export procedures that are directly related to these projects. However, the purchase of furniture, upholstery and similar inventory and passenger cars, busses, minibusses and similar vehicles for carrying people will not be accepted within the scope of the exemption. Spare parts, fuel, amendment, maintenance and repair expenses of these purchases that will not be accepted within the exemption and the administration services units’ amendment, maintenance, repair, heating, lighting expenses, all kinds of office equipment, stationary, food, clothing, and similar purchases and cleaning services will also be outside the scope of the exemption. The prime contractor taxpayers who undertake one of these mentioned projects, will apply directly to the Revenue Administration in writing requesting the application of exemption to the deliveries and services that will be made to themselves within the scope of the afore-mentioned projects, and the Revenue Administration will check whether the taxpayer who has claimed exemption and the Project fall under the projects that are within the scope of exemption, and whether this taxpayer is the prime contractor of this project, the date that the investment period comes to an end and similar other matters by requesting a written information from the related administration that has delegated the project. Pursuant to the positive letter of the administration that has delegated the project, the situation will be reported to the Revenue Administration/ Financial Office that the taxpayer is registered at and this revenue administration or the financial office will issue an exemption document and submit to the taxpayer. Taxpayers who want to benefit the exemption when purchasing products and services within the scope of the exemption will request procedures to be done in accordance with the exemption by handing a copy of this exemption document to the seller and by presenting the exemption document to the related customs office during the import procedures. The exemption will be applied in a single stage and the application of VAT exemption to the taxpayers who provide product delivery and services to the taxpayers undertaking the Project will not be be possible on their purchases related to the products and services they deliver within the scope of the exemption that they make for themselves. The uncompansated part of the VAT that the product and service providers undertake related to the deliveries and services that they provide within the scope of the exemption will be refunded in cash or on account inaccordance with the taxpayers’ demand. In other words, a full exemption is proposed. The taxpayers who want to benefit the exemption are required to give a signed and stamped copy of the exemption document to the seller that provides product delivery and services. In the event that exemption is applied without this document, the taxpayers who provide the deliveries and services together with the purchasers who receive the products and services will be severally bound for the tax, charges, additional charges and ineterest that have been written off. The seller taxpayers who are given a document showing that the delivery or the service is in the scope of the exemption will proceed with the transaction with exemption without requiring any other condition. In the event of determining later on that the transaction did not fulfill the requirements of the exemption that are specified in the related regulation from the beginning or that the requirements are violated later on, the tax that has been written off and the charges, interest and additional charges related to it will be demanded from the purchaser who has been provided delivery or services within the scope of the exemption. Through the application of the above mentioned exemption procedure, the VAT burden over the costs of the project that are also mentioned above are removed. With the exemption applied, project realizations will be accelerated, the duration of the project staying at the private sector or returning to the state will be shortened and financing costs of the investments will decrease. This matter is also expressed on the general preamble of the legislative regulation that has been implemented. The mentioned exemption is valid only during the investment period and will not be applied during the management period. Among the projects that will benefit from the mentioned exemption are Gebze-Izmir Highway, 3rd Airport, 3rd Bridge and Hospital projects in Ankara all of which are under construction. On the other hand, according to the announcements on the VAT communique number 60, due to the qualities of the above mentioned projects, on submission of the facilities to the related administration at the end of the period, the operator will not be paid a fee directly, the cost of the facility will be compensated via operating the facility within the proposed period. Based on these grounds, at the handing over of the facility to the related administration by the operator at the end of the period VAT over the imputed cost will not be demanded.