Tax Incentives Provided in The Establishments in Turkey Operating in The Field of Renewable Energy

Abstract

Increasing population and the energy demands of developing economies in the last few years are raising dependence on fossil fuels, and both political and economical difficulties experienced in obtaining this resource lead countries to renewable energy resources. Besides, global warming and the struggle with increasing environmental problems are making renewable energy policies more important. Renewable energy resources defined as the energy which can renew itself through natural process, are hydraulic, wind, solar, geothermal, biomass, gas derived from biomass (including landfill gas), wave and tidal stream energy and non-fossil energy resources. Turkey, which has the World’s 17th and Europe’s 6th largest economy, is a country that is rich in renewable energy resources. Our country must attach importance to national and renewable energy policies in the face of increasing energy demands in order to reduce the dependence on foreign countries. In this context, hydroelectric centrals, biomass for heating, thermal solar and geothermal energy use comes in the first place among applied renewable energy resources. In the last years, technologies such as geothermal electricity generation based on wind energy has begun to be effective in the energy sector of Turkey. In 2003, the share of renewable energy resources in total electricity generation was 29 percent and the share in installed power capacity was 40 percent. New Investment Incentive Program, which has been in force since January 1, 2012 in Turkey can be applied to renewable energy facilities, R&D initiatives, equipment development activities and renewable energy centrals. In addition, excise tax exemption is provided for biofuels mixed with diesel fuel produced from domestic raw materials. The purpose of this paper is to examine the tax incentives which will be provided to the establishments producing renewable energy in Turkey and to offer suggestions.