New Regulation Coming for VAT and SCT-Free Vehicle Purchases
The long-awaited scrappage incentive for vehicle owners over the age of 25 has resurfaced with a new proposal submitted to the Grand National Assembly of Turkey. The regulation covers newly manufactured vehicles in Turkey and provides excise tax (ÖTV) exemptions for citizens who scrap their old vehicles. Additionally, regulations concerning drivers and heavily damaged vehicles are also being highlighted.
Details of the ÖTV exemption have been disclosed. According to the new regulation on the Assembly's agenda, citizens who own vehicles over 25 years old, specifically models from the year 2000 or older, will be able to purchase zero-emission vehicles produced in Turkey without ÖTV. This initiative, aimed at renewing old vehicles and impacting over 3 million vehicle owners, has once again come to the forefront after a long hiatus.
The new regulation, which facilitates the purchase of new vehicles, aims to reduce the environmental damage caused by old vehicles and decrease energy consumption. Thus, the usage of new vehicles that produce lower emissions will be encouraged. Furthermore, it is planned to increase economic activity within the automotive sector.
The initiative targets significant contributions to both the environment and the economy. In particular, retiring old vehicles from circulation is expected to enhance energy efficiency and reduce fuel waste. Additionally, promoting the use of more environmentally friendly vehicles is anticipated to lower emissions, marking a significant step in environmental protection.
Economically, an increase in the sales of vehicles produced in Turkey is expected. The revitalization of markets may pave the way for new investments in the automotive sector. Moreover, the greater availability of safer and modern vehicles for citizens emerges as another factor that will support economic vitality.
Data from the Turkish Statistical Institute (TÜİK) emphasizes the importance of the regulation. As of August 2024, the number of registered vehicles in traffic has exceeded 30 million. Approximately 25% of these vehicles are 21 years or older, which introduces numerous problems associated with high maintenance costs and low safety standards in traffic. Eliminating the damage caused by aging vehicles to the environment and traffic highlights the significance of this regulation.
The traffic issues and air pollution caused by old vehicles have long been unresolved problems. With the implementation of the new regulation, positive impacts on public health and safety are also anticipated.
The new regulation aims to offer significant advantages to drivers purchasing commercial vehicles. Vehicles acquired for commercial activities by drivers will be exempt from ÖTV and VAT. This incentive is seen as a measure to ease the financial burden on commercial vehicle owners.
However, there is a condition for this exemption: the driver must use the vehicle for commercial purposes for a minimum of 10 years. The rapid wear and high maintenance costs of commercial vehicles are among the justifications for this regulation. This way, long-term economic advantages will be provided to the drivers.
The proposal also includes important steps towards retiring heavily damaged vehicles from traffic. Specifically, it is planned that vehicles severely damaged due to traffic accidents or natural disasters will only be permitted to be sold for spare parts or scrap. This regulation aims to enhance traffic safety and public security.
Severe fines, such as 500,000 TL, are anticipated for those who do not comply with these rules. Moreover, in cases where insurance companies engage in sales contrary to these regulations, it is proposed that their operational licenses be suspended for six months. These measures aim to prevent heavily damaged vehicles from returning to traffic uncontrollably.
This is the first time such a scrappage incentive has been discussed since the one implemented in 2019. This incentive is viewed as a critical step for both citizens and the environment. With the enforcement of the regulation, the opportunity to purchase newly manufactured vehicles in Turkey without ÖTV will be provided. This situation is expected to positively affect the country's economy and the purchasing power of its citizens.