Aim of the law

The aim of this law is to provide arrangements and measures to enable a dynamic structure for the development of Tourism sector by bringing incentive matters and standards which may be useful for development of the sector pursuant to incentive investments and convenience within the borders of TRNC.

Application and Incentive Certificate

Natural or legal persons who want to benefit from incentive matters by this law make a written application to Ministry of Tourism. An Incentive Certificate is given to local or foreign investors, who are confirmed to benefit from one of incentive matters, by the ministry responsible of Tourism.

Incentive Certificate indicates incentive matters which the entrepreneur can benefit, the benefit ratio and the period. The conditions, basis and criteria for incentive and contribution benefit is identified by Decisions or Regulations published by the Cabinet.

Main Incentive Matter

  1. Tax Exemption Incentives

  • It is exempted from Income and Corporate Tax for the first ten (10) taxation period starting from the operating  date and certification of touristic facility. Companies under the status of Publicly held Companies have an extra  exemption period for three (3) taxation periods. The income of individuals who have dividend income from these  companies is also exempted from tax for the same period.
  • Projects, which aim to increase capacity of total bed amount or level of touristic facilities in already in operation and net profit (1) of projects to be confirmed by the Ministry, are exempted from Income and Corporate Tax in taxation period.
  • Building license of tourism investment projects confirmed Ministry of Tourism is exempted from all kinds of tax, duties and charges.
  • Travel, advertisement and entertainment expenses of Tourism organizations such as touristic facilities, tourism  and travel agency and air and maritime transport for promotion and marketing purposes  confirmed by the Ministry is reduced from tax assessment notwithstanding any limitations.

Note: (With the entry into force of Incentive Law No 47/2000, instead of periodical immunizing, “Investment Allowance” of hundred percent is provided for relevant investment and two hundred percent for development priority region on the base of total investment amount.)

  2. Financial Incentives

  • It is forecasted to support investment credit, interest return or financial resources to introduce the tourism of    country abroad and inland by “Tourism Development and Promotion Fund” sources established pursuant to Article 16 of this Law.
  • Financial contributions are made by the mentioned Fund for introductory publications and advertisements with “charter flights” within the scope of conditions to be set by the Ministry.
  • Business with certified touristic facilities are exempted from customs duty  on imported furniture identified in  “Customs Duty Exemption Regulation for Import” arranged as per mentioned law.

Cancellation of Incentive Certificate and Other Incentives

Incentive Certificates and other incentives of individuals who do not perform necessary investments forecasted in current legislation and misuse their rights are cancelled and the sum related to benefited matters are collected with penalties and default interest.