Inward and Outward Processing in Turkey: A DİR Guide

For a manufacturer producing for export, duties paid on imported inputs feed straight into the price of the finished product and weaken its competitiveness abroad. Turkey’s inward processing regime (Dahilde İşleme Rejimi, DİR) is designed to remove that burden, while outward processing reduces duties on goods that are processed or repaired abroad and brought back. This guide covers the purpose of both regimes, authorisations, discharge of the export commitment, equivalent goods and the main risks.

What is the inward processing regime (DİR)?

The inward processing regime allows raw materials, semi-finished goods, packaging and other inputs to be imported for use in export production either without paying import duties or with the duties refunded afterwards. It is a customs procedure with economic impact, and its aim is to make Turkish export products more competitive internationally.

The main legislation is Inward Processing Regime Decree No. 2005/8391 and the Inward Processing Regime Communiqué (Export: 2006/12), together with Customs Law No. 4458 and the Customs Regulation. The Communiqué is amended from time to time, so always check the current text published by the Ministry of Trade.

DİR works through two systems:

Conditional exemption (suspension) system: Inputs are imported with the duties secured by a guarantee. Once the export commitment is met, the guarantee is released. This is the system used most in practice.
Drawback system: Inputs are released for free circulation with duties paid; when the products made from them are exported, the duties are refunded.

Authorisations: which one, and from whom?

There are two routes to using DİR:

Inward processing authorisation certificate (dahilde işleme izin belgesi): Issued by the Ministry of Trade and used mainly under the conditional exemption system. It lists the inputs to be imported, the products to be exported, quantities, values, yield rates (input-to-output ratios) and time limits.
Inward processing permit (dahilde işleme izni): Issued by the customs administration and used for the drawback system and certain specific cases.

An application typically requires:

GTİP codes, quantities and values of the inputs to be imported
Description, GTİP codes and quantities of the products to be exported
Evidence of production capability, such as a capacity report
Consumption ratios between inputs and outputs (yield and waste data)

Making sure the inputs and products in the authorisation match real production prevents most problems at the discharge stage.

Guarantees and time limits

Under the conditional exemption system, a guarantee covers the import duties. The rules allow a reduced guarantee based on criteria such as authorised economic operator status or export performance. Rates are set in the Communiqué and can change.

Each authorisation has a validity period, and the export commitment must be fulfilled within it. An extension can be requested under certain conditions. Time limits vary by sector and type of authorisation, so keep a close eye on the dates in your own authorisation and the extension conditions.

Discharging the commitment

The most critical stage of DİR is discharge (taahhüt kapatma). After exports have been made within the validity period, you document that the imported inputs were actually used in the exported products, and the commitment account is closed.

At discharge, customs and the Ministry review:

The import and export declarations recorded against the authorisation
Whether the exported products match those defined in the authorisation
Yield rates and waste
Any domestically sourced inputs and use of equivalent goods

The discharge application must be made within the period set by the rules. If the commitment cannot be discharged, or is only partly discharged, duties on unused inputs can be collected with interest, the guarantee may be forfeited and penalties under the Customs Law may apply.

Using equivalent goods

Equivalent goods are goods in free circulation that are used in production in place of the imported inputs and have the same characteristics. Under the rules, equivalent goods must fall under the same GTİP as the imported goods at least at the 8-digit level and have the same quality and technical characteristics.

Equivalent goods give you flexibility: you can produce and export using domestic or free-circulation inputs first, then import the same type of input duty-free. This must still be provided for in the authorisation and supported by records.

What is the outward processing regime?

Outward processing is the mirror image of DİR. It allows Turkish goods in free circulation to be temporarily exported for processing, transformation or repair, and the processed products to be re-imported with duty relief.

The main legislation is Outward Processing Regime Decree No. 2007/11864, together with the Customs Law and Customs Regulation. Key points:

Authorisation: An outward processing authorisation is obtained from the customs administration. Some sectors have additional conditions.
Duty calculation: On re-import, the duty on the temporarily exported goods is generally deducted from the duty on the processed product (the differential method). For repairs, duty can as a rule be calculated on the basis of the repair cost.
Identification: It must be possible to show that the temporarily exported goods were used in the processed products, so serial numbers, samples and technical documentation matter.
Standard exchange system: In some cases, especially repairs, a replacement product may be imported instead of the processed product.
Time limits: Periods for temporary export and re-import are set in the authorisation.

Typical uses include sending a machine part back to its manufacturer for repair, or having a semi-finished product made in Turkey processed abroad and returned. These shipments are often time-critical, so fast options such as air freight or express cargo are worth considering.

Pre-application checklist

Before applying for either regime, you should be able to answer these questions clearly:

Which inputs will you import, in what quantities and from which countries?
How much finished product do you get from those inputs, and how much waste?
Which markets will you export to, and on what timeline?
What guarantee capacity do you have, and do you qualify for a reduced guarantee?
Are your stock and production records audit-ready?

Main risks and what to watch

Authorisation vs real production: Wrong yield rates or incomplete input definitions turn into duty and penalty risks at discharge.
Missed deadlines: Failing to export or re-import in time can mean losing the relief and paying the duties.
GTİP errors: Codes on import and export declarations that do not match the authorisation make discharge difficult.
Record keeping: Stock, production and waste records must be ready for audit.
Changes in the rules: Amendments to the Communiqué and decrees can affect your authorisation conditions.

Inward and outward processing can deliver significant cost savings when set up properly, but every step depends on discipline over records and deadlines. Run applications and discharge with your customs broker and financial adviser.

Frequently asked questions

Who can use DİR?

Manufacturers producing for export, manufacturer-exporters and exporters who meet the conditions in the rules. Eligibility is assessed against the requirements of the Communiqué.

What happens if I cannot export within the validity period?

If the conditions are met, you can request an extension. Otherwise, duties on the inputs not exported can be collected with interest and penalties may apply.

When can equivalent goods be used?

When the authorisation allows it and the domestic input has the same characteristics as the imported input under the criteria in the rules. This must be supported by records.

Do I pay duty if I have a faulty machine repaired abroad?

Under outward processing, duty on re-import of temporarily exported goods can generally be calculated on the repair cost. Remember that the goods must be placed under the regime before they leave Turkey.

For inward and outward processing shipments, paperwork, deadlines and transport planning go hand in hand. Medius supports you through customs clearance coordination and logistics consulting.