Turkey revises special tax brackets for cars

ISTANBUL

The number of special consumption tax (SCT) bands for automobiles with an engine displacement of below 1,600 cubic centimeters (cc) has been increased from three to five, lowering tax base limits for some locally-produced car models.

The presidential decree, which was published in the Official Gazette yesterday, is expected to prompt price decreases between 6 percent and 11 percent for those petrol and hybrid cars.

For conventional cars, the upper tax base limit where an SCT of 45 percent is applied has been raised from 92,000 Turkish Liras ($6,765) to 120,000 liras ($8,820).

An SCT of 50 percent will be applied for cars with small engine capacity priced between 120,000 liras and 150,000 liras ($11,000).

An SCT of 70 percent will be applied for cars with small engine capacity priced between 150,000 liras and 200,000 liras ($14,710).

For cars priced above 200,000 liras, an SCT of 80 percent will be applied.

For hybrid cars with electric engines above 50kW but an engine capacity below 1,800cc, an SCT of 45 percent will be applied if the price tag is below 130,000 liras ($9,560).

Car and light commercial vehicle sales decreased 4.6 percent to 737,350 in 2021, according to the Automotive Distributors Association (ODD).

Passenger car sales went down by 7.9 percent in 2021, compared to the previous year, to 561,853 units, while light commercial vehicle sales went up by 7.9 percent to 175,497 units.

Hybrid car sales took a share of 8.8 percent (49,493 units).

The EU is the main automotive export market for Turkey, where top international automakers - Ford, Honda, Hyundai, Mercedes, Renault and Toyota - are operating.