Under the European Union Framework Programmes, grants transferred in return for projects are monitored in a special fund account pursuant to Provisional Article 84 of the Income Tax Law No. 193, and expenditures made from this fund are not taken into account as expenses or cost items in determining taxable corporate income. However, until recently, there had been no exemption status regarding exchange rate gains arising from the year-end valuation of euro-denominated amounts held in project accounts.
In this context, discussions were held with the Revenue Administration to define a tax exemption for exchange rate gains. As a result of these evaluations, it has been concluded that exchange rate gains arising from the valuation of euro-denominated accounts constituting the budgets of EU projects carried out under the Union Programmes within the scope of the IPA III Financial Framework Partnership Agreement should also be considered within the scope of the exemption. Accordingly, grants transferred under the European Union Framework Programmes are now exempt not only in terms of income and corporate tax, but also with respect to exchange rate gains resulting from their valuation.
With this development, beneficiaries in Türkiye are enabled to utilize EU project grants more effectively and with greater financial predictability.
For further information and guidance on legal and financial matters, you may contact the national contact points at ncpfinance@tubitak.gov.tr.