A Turkish manufacturing company owns an expensive industrial machine. The machine breaks down, but the authorised manufacturer or specialist repair centre is located in Germany, Italy, China, the United States or another country.
The company sends the machine abroad for repair.
A few weeks later, the same machine returns to Turkey.
The obvious question is:
Will Turkish Customs charge import duties again on the entire value of a machine that already belonged to the Turkish company?
Generally, not if the transaction has been correctly structured under Turkey’s Outward Processing Regime — Hariçte İşleme Rejimi (HİR).
The purpose of the Outward Processing Regime is precisely to allow goods already in free circulation in Turkey to be temporarily exported for processing, repair or renewal abroad and subsequently returned to Turkey with full or partial relief from import duties, depending on the circumstances.
However, the result depends heavily on several questions:
Was the machine declared for outward processing before leaving Turkey?
Can Customs prove that the returning machine is the same machine that was exported?
Was the repair free of charge under warranty?
Was the repair performed for a fee?
Was the original machine actually repaired, or was a completely new replacement machine sent instead?
These distinctions can produce very different customs consequences.
1. What Is the Outward Processing Regime?
The Turkish Outward Processing Regime allows goods already in free circulation in Turkey to be temporarily exported outside the Turkish Customs Territory for processing activities and subsequently brought back into Turkey with full or partial relief from import duties.
The regime includes goods sent abroad for:
- processing;
- repair;
- renewal;
- further manufacturing.
The Ministry of Trade specifically identifies the repair of imported or domestically owned goods by the original manufacturer abroad as one of the practical purposes of the regime.
Therefore, when a Turkish company sends its own industrial machine abroad solely because it needs repair, the transaction should generally be considered through the outward processing framework, rather than as an ordinary permanent export followed by an unrelated new import.
2. The Basic Principle: You Do Not Normally Pay Duty Again on the Full Machine Value
Assume that a Turkish company owns a machine worth EUR 500,000.
The machine develops a technical defect.
The company sends it to Germany.
The German manufacturer repairs the machine and sends the same machine back to Turkey.
If the outward processing procedure was properly established, Turkish Customs does not simply treat the returned machine as though the company had purchased a new EUR 500,000 machine abroad.
The customs regime recognises that the machine was already in free circulation in Turkey before it left.
Where the repair is performed for a fee, the special rules generally focus the customs calculation on the repair cost and relevant associated expenses, rather than taxing the full original machine value again.
This is the central advantage of using the Outward Processing Regime correctly.
3. What If the Repair Is Free Under Warranty?
This is the most favourable situation.
Where the machine is temporarily exported for repair and the repair is carried out free of charge because of:
- a contractual warranty;
- a statutory obligation; or
- a manufacturing defect,
the machine may be returned to Turkey with full relief from import duties, provided that the company can prove the basis for the free repair.
For example:
A Turkish factory purchases a CNC machine from a German manufacturer.
Eight months later, the spindle fails.
The manufacturer’s warranty is valid for two years.
The German company accepts that the failure falls within the warranty and repairs the machine without charging the Turkish company.
If the machine was temporarily exported under the appropriate outward processing procedure and the warranty-based free repair can be documented, the returning machine may benefit from full import-duty relief.
4. What Documents Prove a Warranty Repair?
The company should not simply tell Customs:
“The repair was free because the machine was under warranty.”
The reason for the free repair should be documented.
Official Turkish customs guidance recognises warranty documents, contractual arrangements and manufacturer documentation establishing a manufacturing defect as relevant evidence for full relief in repair cases.
Depending on the case, useful documents may include:
- original purchase contract;
- warranty certificate;
- manufacturer’s warranty terms;
- manufacturer’s letter accepting the warranty claim;
- service report;
- technical fault report;
- repair report;
- zero-value repair invoice;
- correspondence with the manufacturer;
- documentation confirming that no repair fee was charged.
The documentation should clearly explain why no payment was made.
A simple invoice stating “EUR 0” is useful but may not, by itself, explain whether the repair was genuinely covered by warranty.
5. What If the Turkish Company Pays for the Repair?
This does not mean that Customs should normally tax the full value of the machine again.
Where the machine is temporarily exported for repair and the repair is performed for consideration, the Ministry of Trade states that the customs value for the special repair calculation is based on an amount equal to the repair costs.
The applicable import taxes are then determined according to the tariff rate and other taxation elements applicable to the processed product when the return declaration is registered.
However, the calculation may also take into account:
- freight;
- insurance;
- and other expenses incurred abroad in connection with the repair.
Therefore, the practical difference is substantial.
Example
Machine’s original value:
EUR 400,000
Repair cost:
EUR 20,000
Relevant freight, insurance and foreign repair-related expenses:
EUR 4,000
The outward processing system does not ordinarily begin by treating the transaction as a fresh EUR 400,000 machine import.
Instead, in a paid repair case, the special valuation system focuses on the repair-related value and applicable additional costs, subject to the precise customs and tax calculation applicable to the machine.
6. Does “We Already Paid Customs Duty When We Originally Bought It” Solve the Problem?
It helps explain the commercial background, but it is not enough by itself.
The company should not rely exclusively on:
“This machine has been in our factory for five years. We already paid the import taxes.”
Customs needs to connect the machine leaving Turkey with the machine subsequently returning.
The key procedural mechanism is the Outward Processing Regime.
Accordingly, the company should establish the correct customs procedure before the machine leaves Turkey.
If the company permanently exports the machine without setting up the proper temporary/outward-processing procedure and several months later tries to import a machine with similar specifications, proving entitlement to the special treatment may become much more difficult.
7. Where Does a Company Apply for Repair-Based Outward Processing?
Repair transactions have an important procedural advantage.
Where goods are being sent outside the Turkish Customs Territory for repair, the application for outward processing permission is made to the relevant Customs Directorate.
According to the Ministry of Trade, the customs declaration approved by the Customs Directorate itself constitutes the outward processing permission for repair transactions.
A separate Outward Processing Authorisation Certificate is not issued for this type of repair procedure.
This is different from certain other outward-processing activities involving raw materials, semi-finished products or manufacturing operations, where applications may need to be made through different administrative channels.
8. The Company Must Establish the Machine’s Identity Before It Leaves Turkey
This is one of the most important practical issues.
Customs must be able to determine that:
the machine returning to Turkey is the same machine that previously left Turkey.
The Ministry’s customs guidance specifically states that identity verification under the Outward Processing Regime may be made using information such as:
- serial numbers;
- labels;
- technical documents;
- samples;
- analysis reports;
- contracts;
- invoices.
For an industrial machine, the most important identification data will usually include:
Manufacturer: ABC Maschinen GmbH
Model: X5000
Serial Number: 23X-481995
Year: 2024
Machine Type: Five-axis CNC machining centre
Photographs of the serial-number plate and machine can also be commercially useful supporting evidence.
The customs documentation should be prepared so that there is no realistic doubt about the identity of the machine when it comes back.
9. Why Is the Serial Number So Important?
Consider this scenario.
A Turkish company temporarily exports:
Siemens industrial drive – Serial No. A123456
Three months later, a Siemens drive returns from Germany.
Its serial number is:
B789012
Customs may legitimately ask:
“This is not the product that left Turkey. What happened to the original machine?”
The answer could fundamentally change the customs treatment.
If the original product was repaired, the same item’s identity should generally be preserved.
If the manufacturer instead replaced it with an entirely new product, the special rules concerning replacement or standard exchange may need to be analysed.
That is why the machine’s serial number should never be treated as an insignificant detail.
10. What If the Original Machine Cannot Be Repaired?
This is one of the most important traps.
Assume that a Turkish company sends a EUR 100,000 electronic device abroad under warranty.
The manufacturer examines it and says:
“This machine cannot be repaired. We will send you a brand-new machine instead.”
The company may assume:
“It is free because of the warranty, so Customs will also treat the new machine as tax-free.”
That assumption can be incorrect.
Official customs guidance states that where the machine sent for repair cannot be repaired and a new item with the same technical characteristics is sent instead, the new item is, as a rule, subject to the normal release-for-free-circulation regime, regardless of whether the original item was under warranty, subject to specific statutory exceptions.
Therefore:
repairing the original machine
and
replacing it with a new machine
must not be treated as identical customs events.
11. What Is the Standard Exchange System?
Turkish customs law also contains a Standard Exchange System — Standart Değişim Sistemi in connection with repairs.
The system allows a replacement product to be used under specified conditions while the original item is being repaired abroad.
The Ministry explains that a non-free-circulation replacement product may temporarily be imported for use during the period in which the original item is undergoing repair outside Turkey.
The replacement product must satisfy applicable conditions, including compatibility with the temporarily exported goods in terms of tariff position, commercial quality and technical characteristics.
In appropriate circumstances, and against security, the replacement product may even be imported before the original machine is exported.
This mechanism can be particularly important for factories where stopping a production line for several weeks would cause substantial economic losses.
12. Example: Production Cannot Stop
A Turkish automotive-parts manufacturer operates with a specialised German control unit.
The unit fails.
Repair abroad will take six weeks.
Without the unit, the entire production line would stop.
Instead of simply waiting for the original unit to return, the company may explore whether the Standard Exchange System can be used so that an eligible replacement unit enters Turkey temporarily while the defective unit is sent abroad.
Official customs guidance confirms the existence of this mechanism and provides for prior import of the replacement item in specified circumstances, subject to security and time requirements.
For high-value production equipment, this option should be assessed before shipping the defective machine.
13. What If New Parts Are Installed During the Repair?
A repair does not necessarily consist only of labour.
The foreign manufacturer may:
- replace a motor;
- install a new circuit board;
- replace bearings;
- replace a laser module;
- install a new controller;
- update components.
Where the repair is paid, these costs may form part of the repair-related value used for customs purposes.
Accordingly, the foreign repair invoice should distinguish, as clearly as possible:
- labour;
- replacement parts;
- diagnostic work;
- freight;
- insurance;
- other repair-related charges.
Attempting to use an artificially low repair invoice while making additional payments through a separate document creates customs valuation risks.
The Ministry’s rules specifically require the repair valuation to reflect the actual repair-related payment and associated expenses, subject to the applicable statutory conditions.
14. What If the Manufacturer Repairs the Machine for EUR 1 Because the Companies Are Related?
Related-company transactions require particular caution.
The Ministry’s official explanation states that the special paid-repair calculation applies on the condition that the authorisation holder has not made payments other than the repair costs and that the amount paid has not been influenced by the relationship between the authorisation holder and the person performing the repair.
For example:
Turkish Company A and German Company B belong to the same corporate group.
German Company B repairs a EUR 500,000 machine and issues a EUR 500 invoice even though the normal repair price would be EUR 30,000.
Turkish Customs may examine whether the stated repair cost reflects the genuine economic value of the transaction.
The mere existence of an invoice does not prevent customs valuation review.
15. Does the Company Have to Prove the Machine Was Actually Broken?
For repair-based outward processing, the fact that the item is genuinely being sent for repair should be capable of verification.
Official Turkish customs rules provide for Customs to determine whether the goods are in a repairable condition. Where Customs cannot make that determination itself, documentation such as a technical report from the authorised service or an appropriate chamber may be requested.
Therefore, before export, a company should ideally prepare:
- technical malfunction report;
- authorised service report;
- error codes;
- photographs;
- manufacturer’s correspondence;
- repair quotation;
- warranty claim correspondence.
This becomes especially useful where an expensive but externally intact machine is being sent abroad.
16. Should the Machine Be Sent by Ordinary Export Declaration?
The machine must be properly declared when leaving Turkey.
For repair transactions, the important point is that the customs declaration must reflect the outward processing/temporary export purpose, rather than presenting the transaction as though the Turkish company had permanently sold the machine abroad.
The Ministry’s current customs regime codes separately recognise goods in free circulation temporarily exported under the Outward Processing Regime.
A customs broker should therefore be clearly instructed:
“This machine is not being sold. It is leaving Turkey temporarily for repair and will return.”
Using documentation inconsistent with that economic reality can create problems at re-importation.
17. The Pro Forma Invoice Should Be Clear
Where appropriate, the shipping documentation may contain wording such as:
“Temporary Export for Repair – Goods Will Be Returned to Turkey.”
For a warranty repair:
“Temporary Export for Warranty Repair – No Transfer of Ownership.”
For a paid repair:
“Temporary Export for Repair – Repair Charges to Be Invoiced Separately.”
The documents should also contain:
- machine description;
- GTİP where appropriate;
- manufacturer;
- model;
- serial number;
- original value for identification purposes;
- reason for shipment.
The objective is to ensure that nobody examining the export documents mistakenly concludes that the Turkish company sold the machine abroad.
18. Is Ownership Transferred to the Foreign Repair Company?
Normally, no.
A genuine repair transaction does not involve transfer of ownership.
The Turkish company remains the owner.
The machine merely leaves Turkey temporarily for a specific processing activity.
This should be reflected consistently in:
- the repair agreement;
- pro forma invoice;
- transport documents;
- customs declaration;
- accounting records.
If the commercial documents instead show an ordinary sale to the foreign company and later a new sale back to the Turkish company, Customs may understandably treat the transactions differently.
19. How Long Can the Machine Stay Abroad?
The applicable outward processing permission contains a time limit.
The Ministry’s customs guidance states that an Outward Processing Authorisation/Permission is generally granted for a maximum initial period of 12 months, with extension mechanisms available upon request.
The company should therefore monitor:
- export date;
- permission expiry date;
- expected repair completion date;
- shipment-back date.
If the foreign repair centre says:
“We need another four months,”
the Turkish company should not simply ignore the customs authorisation period.
A timely extension should be considered.
20. What Happens If the Company Misses the Time Limit?
Failure to comply with the outward processing permission may lead to loss of the intended customs advantage or collection of taxes and administrative consequences.
The Ministry expressly warns that amounts exceeding the quantities or values authorised under the regime may result in tax collection and that cancellation or non-compliance with the permission can affect the taxes due.
Therefore, companies should not treat the permission as a formality that becomes irrelevant once the machine has physically left Turkey.
The file should remain under active customs monitoring until the procedure has been closed.
21. What Happens When the Machine Comes Back?
When the repaired machine returns to Turkey, the company must connect the return transaction with the original outward processing procedure.
Customs may examine:
- original temporary export declaration;
- outward processing permission;
- serial number;
- model;
- repair report;
- foreign invoice;
- warranty documents;
- freight documents;
- insurance;
- replacement-part information.
If the same machine returns and the conditions of the regime are satisfied, the applicable full or partial duty relief can then be applied.
22. Is VAT Also Automatically Zero?
No. This issue should be analysed separately from customs-duty relief.
A major practical mistake is to assume:
“Full customs-duty relief means no tax of any kind will arise.”
The Ministry’s outward processing guidance expressly notes VAT consequences in connection with goods returning under the regime, while separate VAT rules may apply to the value added abroad.
Accordingly, a company should separately calculate:
- customs duty;
- VAT;
- any additional customs duty;
- other import taxes or financial obligations;
- treatment of the repair value.
The exact result depends on the machine’s GTİP, origin, repair structure and applicable exemption provisions.
For this reason, “Will I pay customs duty again?” and “Will I pay any tax at all?” are not identical questions.
23. Example: Free Warranty Repair
A Turkish company owns a Swiss industrial measuring device worth EUR 200,000.
It was originally properly imported into Turkey.
The device develops a manufacturing defect.
The manufacturer accepts the claim under warranty.
The Turkish company:
- applies to the competent Customs Directorate;
- exports the equipment under the Outward Processing Regime;
- records its model and serial number;
- obtains a warranty letter;
- pays no repair charge;
- brings the same device back to Turkey.
Result: If the conditions are established and the free repair is proven to result from the warranty, contractual obligation, statutory obligation or manufacturing defect, full relief from import duties may be available.
The company should still separately examine VAT and any other tax consequences applicable to the transaction.
24. Example: EUR 25,000 Paid Repair
A Turkish textile company sends a weaving machine to Italy.
Machine value:
EUR 300,000
Repair invoice:
EUR 25,000
Freight and insurance relating to the repair transaction:
EUR 3,000
The same machine returns.
Result: If the transaction has been properly conducted under the Outward Processing Regime, the Turkish authorities do not simply impose import taxes again as though the company had purchased a new EUR 300,000 machine.
The paid-repair rules instead use the repair cost as the special customs-value basis, while relevant freight, insurance and other foreign repair-related expenses are also taken into consideration.
25. Example: Manufacturer Sends a Brand-New Replacement Machine
A Turkish company sends a defective laser machine to Japan.
The Japanese manufacturer says:
“Repair is impossible. We destroyed the defective machine and are sending you a new machine with the same specifications.”
Even if the replacement is provided free of charge under warranty, the situation is not automatically treated as an ordinary repair of the original machine.
The Ministry states that where the repair is impossible and a new item with the same technical characteristics is supplied instead, the new item is generally processed under the release-for-free-circulation regime, subject to specific exceptions.
This is why the Turkish company should contact its customs broker before accepting the replacement shipment.
26. Example: Manufacturer Changes the Serial Number During Repair
Sometimes the manufacturer may replace the machine’s main body or another component containing the serial number.
The machine that comes back may therefore have a different serial number even though the commercial transaction is described as a “repair.”
This is a high-risk customs situation because the original identity chain has changed.
Before shipment back to Turkey, the company should obtain a detailed manufacturer report explaining:
- why the serial number changed;
- which components were replaced;
- what happened to the original machine;
- whether this is a repair or replacement;
- whether the original serial-number plate was destroyed;
- what the new serial number is.
Customs should not first learn of the discrepancy when the machine physically arrives at the border.
27. What Documents Should the Turkish Company Keep?
A well-prepared repair file should normally contain:
Before Export
- original machine purchase invoice;
- original import documents where available;
- technical malfunction report;
- authorised service report if required;
- repair quotation;
- warranty certificate;
- correspondence with manufacturer;
- machine photographs;
- model and serial-number records;
- temporary export/outward processing customs declaration;
- outward processing permission.
During Repair
- foreign service report;
- correspondence;
- repair order;
- replacement-parts list;
- photographs where appropriate;
- warranty confirmation.
On Return
- repair invoice;
- zero-value warranty invoice where applicable;
- detailed service report;
- freight documents;
- insurance documents;
- packing list;
- return transport document;
- manufacturer declaration if serial numbers have changed.
The documents should tell one consistent story:
This is the machine that left Turkey, this is why it left, this is what was done to it abroad and this is why it is now returning.
28. Five Mistakes That Can Make the Company Pay More Tax
Mistake 1: Sending the Machine as an Ordinary Permanent Export
If the export documentation does not establish that the machine left temporarily for repair, the company may face a much more difficult evidentiary problem when it returns.
Mistake 2: Failing to Record the Serial Number
If Customs cannot establish identity, the returning equipment may appear to be a different machine.
Mistake 3: Saying “Warranty” Without Documentary Proof
Full relief for free repair depends on proving the relevant warranty, contractual/statutory obligation or manufacturing defect.
Mistake 4: Treating a Replacement Machine as a Repaired Machine
A brand-new replacement can have fundamentally different customs consequences.
Mistake 5: Hiding Repair Costs
Repair costs, relevant freight, insurance and other associated expenses must be properly evaluated in a paid repair transaction.
Conclusion
A Turkish company that sends its machinery abroad for repair does not normally have to pay customs duty again on the entire value of the machine when it comes back, provided that the transaction has been correctly structured under the Outward Processing Regime (Hariçte İşleme Rejimi).
The tax result depends primarily on the type of repair.
If the repair is free of charge because of a warranty, contractual or statutory obligation, or manufacturing defect:
Full relief from import duties may apply if the company proves the relevant circumstances.
If the repair is paid:
The special customs calculation is generally based on the repair cost, together with applicable freight, insurance and other repair-related expenses, rather than taxing the entire machine value again.
If the original machine cannot be repaired and a brand-new machine is sent instead:
The transaction should not automatically be treated as a normal repair; as a rule, the replacement may fall under ordinary free-circulation import rules unless a specific exception or applicable standard exchange mechanism applies.
The safest practical approach is therefore:
Do not send the machine abroad first and ask about customs later.
Before export, determine the correct outward processing procedure, record the machine’s identity and serial number, document whether the repair is paid or under warranty and ensure that the customs declaration clearly shows that the machine is leaving Turkey temporarily for repair.
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