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Import operations are the lifeblood of trade between countries and play an important role for businesses operating in many different sectors. Importing may seem easy, but it is actually a highly detailed and complex process.
Today, we will address what import is, how of it can be done, and the points to be considered. You will gain knowledge on many topics ranging from the benefits and disadvantages of importing, to the necessary documents for import, customs duties, and protective measures.
If you are ready, let's begin!
What is Import?
Import is the process of bringing goods or services from outside into a country or region. This process is carried out to procure products that are not available or not available in sufficient quantities in local markets. The import process constitutes an important part of trade between countries and is a significant tool for economic growth, business opportunities, and consumer choices. For example, Turkey imports high volumes of wheat and petroleum because the quantity produced in the country cannot meet the demand.
What is the Release for Free Circulation Regime?
The release for free circulation regime is a customs regime applied at the entry of products imported from foreign countries into Turkey. Within the scope of this regime, customs duties of the products imported into Turkey can be reduced or zeroed according to trade agreements.
The release for free circulation regime provides a significant advantage for companies wishing to import. Reducing or zeroing customs duties allows products to enter Turkey at more affordable prices. This enables the products to become more competitive and allows consumers to purchase quality products at cheaper prices.
However, products imported within the scope of the release for free circulation regime must comply with the legislation in Turkey. Therefore, companies wishing to import must check the conformity certificates and standards of the products. Otherwise, the entry of products into Turkey may be prevented or punitive action may be applied.
Things to Know Before Importing
There are many details you need to know before importing. Although importing can be a profitable business, it can end in disappointment if you do not look at the right points.
First, you need to conduct detailed research on the product you will import. You should make an analysis by examining the market demand for the product, competitor products, the quality, price, and other similar factors of the product. This way, you can determine which products to import and which ones will yield profit for you.
Secondly, you must take into account the customs duties and other related costs of the products you will import. Customs duties on products, port operations, transportation fees, and other logistics costs can be quite high. Therefore, you need to account for these costs as well.
Additionally, you must check whether the products you import comply with quality standards and safety measures. It is highly important that the products do not contain substances harmful to health and comply with quality standards. Therefore, you must be very careful about the safety and quality of the products you will import.
Finally, you must be very meticulous about supplier selection. It is extremely important that the supplier from whom you procure the products to be imported is reliable and offers quality products. You should not purchase products before researching the financial situation, product quality, and reliability of the supplier.
Who Can Import?
Importing is a business model that has an important place in world trade and is preferred by many people. However, it is not possible for everyone to import. In order to import, certain criteria must be fulfilled. These criteria can be listed as follows:
• Companies engaged in commercial activities: Companies wishing to import must have commercial activities in Turkey. If you have a registered company in Turkey, you can import on behalf of this company.
• Individual entrepreneurs: Individual entrepreneurs in Turkey can also import. However, individual entrepreneurs also need to open a business to carry out their commercial activities.
• Firms in foreign countries: A firm registered in foreign countries can import its products to Turkey. However, these firms must open a representative office or a branch in Turkey.
• Individual importers: Individual importers can import products in their own name without having a registered company or business in Turkey. However, individual importers must also follow certain procedures.
The persons included in this list must first be registered in Turkey to import. In addition, the products you want to import must comply with the regulations in Turkey and must not be subject to special procedures.
Required Permits and Documents for Import
There are many important details that anyone wishing to engage in import operations must pay attention to. These details include the required permits and documents for import. It is extremely important to complete these documents fully when conducting import operations. In this article, I will try to explain which documents are needed by those who want to perform import operations in Turkey and where they can obtain these documents.
• Import Regime Certificate (IRC): This document is used to determine in which category the products to be imported are located. Those who wish to import must obtain this document.
• Invoice: An invoice document showing the sales prices of the products to be imported is needed. The invoice is also used as a document proving the agreement of the parties.
• Certificate of Origin: This is a document showing which country the products to be imported come from. This document is used at customs in the import of products.
• Analysis Reports: Analysis reports showing the quality of the products to be imported are used in customs inspections.
• Transport Document: This is a document showing how the products to be imported will be transported and with which transport company they will be sent.
• Insurance Policy: An insurance policy belonging to the products to be imported is also required. This policy covers potential damages in case the products are damaged or lost at customs.
While conducting import operations, in addition to the documents listed above, some additional documents may be requested. Preparing all of these documents fully is of utmost importance for the smooth completion of the processes.
As for obtaining documents, there are many institutions and organizations in Turkey from which you can obtain these documents. You can easily handle those related to the logistics and transport area easily via Navlungo, including customs clearance.
How is Import Done?
1. Identifying the Product to be Imported
As the first step, you need to identify the product you want to import. You need to research whether this product is sold in the country, how much its price is, the cost of import, and whether the product complies with the legislation in Turkey.
2. Preparation of Documents to be Used in Import Procedures
The necessary documents for the arrival of the product you want to import to Turkey must be prepared. Among these documents are the Import Regime Certificate (IRC), Certificate of Origin, Invoice, Transport Document, and Insurance Policy. You need to prepare these documents in accordance with current legislation.
3. Customs Duty Calculation
To calculate the customs duty rates of the product you want to import, you need to examine the Turkish Customs Tariff Nomenclature. Customs duty rates may vary depending on factors such as the type, quantity, and origin of the product.
4. Customs Procedures
The most important step in import operations is customs procedures. During customs procedures, the customs declaration and required documents of the products are presented to customs officers. Customs officers inspect whether customs duties on the products have been paid, whether there is any situation that prevents the products from entering the country, and the compliance of the products with the legislation.
If you have shortcomings in matters such as logistics and customs, you can easily handle all your logistic processes with Navlungo. We can manage all your processes for you.
5. Payment and Delivery
After customs procedures are completed, importers can retrieve the products by making the payment. Payment is usually made through banks. Delivery, on the other hand, is carried out through shipping firms or cargo companies.
If you need a business partner to run the process together from end to end, you can contact Navlungo. Our experienced team will support you from the beginning to the end of the process and run all logistics processes.
What are the Import Types and Scopes?
The types and scopes of imports are quite broad. Here, we can simply explain the different types and scopes of imports as follows:
• Commercial Import: Commercial import is the state where a country buys goods and services from other countries to use in commercial activities. The purpose of this type of import is to offer a wider range of products to consumers and to reduce production costs. For example, Turkey imports many products from all over the world, such as oil, natural gas, automobiles, electronics, and food.
• Industrial Import: Industrial import is the procurement of raw materials or intermediate goods used in the production process from abroad. Industrial import reduces production costs and provides a competitive advantage to domestic producers. Turkey carries out industrial imports at high rates, especially in textile, chemistry, metal, food, and electronics sectors.
• Tourism Import: Tourism import is tourists coming to a country and spending money. This type of import is important for businesses operating in the tourism sector. Turkey is among the prominent countries globally in tourism imports.
• Cultural Import: Cultural import is a country adopting the culture of other countries or adapting cultural elements taken from other countries into its own culture. This type of import increases cultural exchange between countries and promotes understanding and respect between cultures.
• Service Import: Service import is a country purchasing services from other countries. For example, a country can buy services such as education, health, finance, tourism, and consultancy from abroad. Turkey imports services at high rates, especially in finance, health, and tourism sectors.
How is Import Logistics Provided?
In import logistics, Navlungo is a logistics company that manages its clients' import operations. It manages the transportation modes of its clients' goods, customs procedures, warehousing, and insurance.
It offers maritime, air, and road transport options and prepares the customs declarations of its clients' goods, pays customs duties, and handles the clearance of the goods from customs.
Additionally, it ensures the safe and correct warehousing and insurance of its clients' goods. Navlungo simplifies and properly manages the import operations of its clients.
What are Goods Subject to Import Prohibitions and Restrictions?
Import transactions in Turkey are carried out in accordance with the laws and restrictions determined by the state. While the import of some products is prohibited, some products are subject to import restrictions. Here are some product groups whose import is prohibited or subject to restrictions in Turkey:
• Products Prohibited for Import: Products whose import is prohibited in Turkey include various weapons and ammunition, explosives, narcotics and stimulant substances, certain products used for medical purposes, hazardous waste and garbage, and products based on child labor. The import of these products is strictly prohibited, and heavy penalties may be imposed on importers.
• Products Restricted for Import: Products whose import is subject to restrictions in Turkey include various agricultural products, food products, industrial products, and electronic products. Certain certificates, permits, or taxes are required for the import of these products. For example, the import of tobacco and alcohol products is restricted, and special permits are required for their import. Similarly, the import of cars is also restricted, and certain taxes must be paid for their import.
• Products Limited for Import: Products whose import is limited in Turkey include various textile products, electronic products, shoes, household goods, furniture, toys, and similar items. Certain quotas have been set for the import of these products, and import can be made within these quotas.
What are Goods Subject to Import Licensing?
Import transactions in Turkey are carried out in accordance with the laws and restrictions determined by the state. During import operations, special permits are required for the import of certain products. These products are called "goods subject to import licensing." Having detailed information about goods subject to import licensing is highly important for companies and individual importers engaged in import operations. Some products whose import is subject to permit in Turkey are as follows:
• Agricultural Products: In Turkey, agricultural products require special licenses to meet certain health standards. In this context, in addition to various documents for the import of agricultural products, permits obtained from the Ministry of Health are required. Agricultural products whose import is subject to license include animal products, fruits, and vegetables.
• Industrial Products: Iron, steel, copper and aluminum products, chemical products, textile, and leather products are subject to licensing. For the import of these products, in addition to Operating License, Industrial Registry Certificate, Preliminary Import License, and similar documents, the approval of the relevant Ministries is required.
• Electronic Products: For the import of radio and television receivers, wireless communication devices, computers, tablets, and smartphones, an Import License or similar documents are required.
• Other Products: Other products whose import is subject to license include medical equipment, products subject to customs duties, and raw material materials. For the import of these products, approval of the relevant Ministries, customs duty payments, and other documents are required.
What are Import Duties?
Import duties in Turkey are determined according to the Customs Tariff Nomenclature. Import duties vary according to the type of product and the country from which it is imported. Below is a table showing the most commonly applied import duties in Turkey:
Tax Type | Tax Rate |
|---|---|
Customs Duty | Variable (Varies according to the type of product and the country of import) |
VAT (Value Added Tax) | 18% |
SCT (Special Consumption Tax) | Variable (Applied to alcohol, tobacco, luxury vehicles, and some consumer products) |
As can be seen from the table above, the most commonly applied types of import duties in Turkey are Customs Duty, VAT, and SCT. Customs Duty is a tax applied to imported products so that they can compete against similar products in Turkey.
VAT, on the other hand, is a tax applied at a rate of 18% over the sales price of the imported product in Turkey. SCT is a special tax applied for the import of specific products and is valid for alcohol, tobacco, luxury vehicles, and some consumer goods.
How to Calculate Import Duties?
Although calculating import duties seems to be a highly complex task, it can actually be calculated easily by following a few simple steps.
First, you need to find the code of the imported product in the Customs Tariff Nomenclature. After finding this code, you need to check the rates opposite the relevant product in the Tariff Nomenclature to find the Customs Duty rate.
To calculate the Customs Duty rate, we use the CIF (Cost, Insurance, Freight) value of the imported product. The CIF value represents the sum of all costs added to the sales price of the product.
Then, to calculate the VAT rate, we must apply the 18% rate on the CIF value.
SCT rates may vary according to the type and value of the imported product. To learn the SCT rates, you also need to look at the Customs Tariff Nomenclature.
Consequently, to calculate import duties, you must determine the product's code in the Customs Tariff Nomenclature, the CIF value, and the Customs Duty, VAT, and SCT rates. Doing this procedure correctly will help you both fulfill your tax obligations and avoid unnecessary payments.
Advantages and Disadvantages of Import
Like any business, importing has positive and negative aspects. In the table below, you can see the advantages and disadvantages of importing:
Advantages | Disadvantages |
|---|---|
Goods and services of producers in different countries may be cheaper | The competitiveness of domestic producers may decrease |
Foreign trade volume increases, the economy grows | Unemployment may increase with the bankruptcy of domestic producers |
Offers a wider range of product choices to domestic consumers | There may be risks created by political and economic disputes with foreign countries |
Domestic producers can be enabled to follow technological developments and thereby increase their competitiveness | Foreign dependency may increase and the domestic economy may be negatively affected |
Provides foreign currency inflow to the country where the import is made | Domestic consumers' dependence on imported products may increase |
Trade Protective Measures in Import (Trade Policy Defense Instruments - TPDI)
Measures known as Trade Policy Defense Instruments (TPDI) are used to reduce the effect of imports on the domestic producer. These instruments are also frequently used in Turkey. So, what is TPDI and what methods are used?
TPDI is a series of trade policy instruments that countries use to protect their own economic interests. These include different methods such as anti-dumping measures, countervailing duties, import quotas, and customs tariffs.
• Anti-dumping measures: Countries may apply anti-dumping measures in case foreign producers sell their products at lower prices than their domestic counterparts. This measure aims to align the prices of foreign producers' products with domestic producers' prices by increasing them.
• Countervailing duties: In some cases, some costs included in foreign producers' products may be costs that domestic producers do not face when producing the same items. In this case, by applying countervailing duties, the cost advantage of foreign producers can be eliminated.
• Import quotas: An import quota is a measure that limits the import of a specific product from foreign producers. This measure can enable domestic producers to have a better position in the market.
• Customs tariffs: Customs tariffs aim to align imported products' prices with domestic producers' prices by adding extra tax weight on them.
Although Trade Policy Defense Instruments are used to protect domestic producers, their excessive use may go against foreign producers and have negative impacts on consumers. Therefore, determining the right policies and utilizing TPDI appropriately is extremely important.
Current Turkish Import Graph
This table shows Turkey's import amounts, in billions of dollars, between the years 2012-2022. These data provide an idea of how Turkey's imports have changed over time.
Year | Import Amount (billion $) |
|---|---|
2012 | 236.4 |
2013 | 251.9 |
2014 | 242.2 |
2015 | 198.5 |
2016 | 198.9 |
2017 | 234.2 |
2018 | 223.7 |
2019 | 223.6 |
2020 | 199.3 |
2021 | 253.8 |
2022 | 278.2 |
What is a Quota in Import?
A quota in import is the limitation of a specific product entering the country to a specific amount throughout the year. The application of quota in imports in Turkey can be determined by the Ministry of Agriculture and Forestry or the Ministry of Trade and can usually be directed to sectors such as agricultural products, animal products, and textiles. Quotas can be applied for purposes such as protecting the country's imports, supporting local producers, or preventing resource outflow of foreign exchange.
What is Free of Charge Import?
Free of charge import is a term used in trade between countries and refers to a transaction that allows the importer to import a specific product without paying a fee. Free of charge imports in Turkey can only be carried out by public institutions or private sector companies that meet specific conditions. Free of charge import is usually used in the import of goods needed for areas such as education, health, research, and similar fields, and generally provides exemption from taxes and duties.
