Health tourism and tax incentives in Türkiye
In recent years, there has been an important agenda in Türkiye: To ensure that Türkiye becomes one of the preferred countries for health tourism.
This goal is not just a discourse. In fact, it is also among the targets in the 2019-2023 Strategic Plan of Turkish Ministry of Health. The target is not only for the private sector but also public sector: City hospitals, which currently have a low share, are also a stakeholder in this goal.
The OECD (Organization for Economic Cooperation and Development) estimates that 50 million people travel to another country every year as part of health tourism and predicts an increase of 25% each year over the next 10 years.
Of course, there is also a very serious international competition in this field. Many countries are trying to grab a piece of the pie. Türkiye, on the other hand, continues to get good results with the work it has done in recent years. It is certain that Turkey has a very important potential in this field. Because the figures tell us this.
| HEALTH TOURISM |
| Medical tourism |
| Thermal tourism |
| Disabled and elderly tourism |
One of the most important issues in health tourism is quality health care and the other is pricing. In a study conducted by Patients Beyond Border, it was determined how much cost savings were realized in other countries compared to the USA. According to the list, Türkiye is at the forefront with a considerable cost advantage.
| Countries with cost advantage in health expenditures compared to the US (%) | |
| Brazil | 20-30 |
| Singapore | 25-40 |
| South Korea | 30-45 |
| Spain | 30–70 |
| Taiwan | 40-55 |
| Mexico | 40-65 |
| Costa Rica | 45-65 |
| TÜRKİYE | 50-65 |
| Tailand | 50-75 |
| Malaysia | 65-80 |
| 65-90 | |
Türkiye's place in the world
Considering the World Tourism Organization's data for 2022, we see that countries such as the USA, Cuba, Mexico, India, Germany, Türkiye, Hungary, Thailand, Malaysia and Singapore are at the forefront of health tourism.
Tax supports
The Turkish tax system currently provides incentives for health tourism in three different tax laws. Two of them exempt a portion of foreign earnings from income tax and corporate tax. The other is the VAT exemption for preventive medicine, diagnosis, treatment and rehabilitation services provided to foreigners.
Earnings deductions in Income and Corporate Tax Laws
For sole proprietorships (income taxpayers) operating in the field of health subject to the permission and supervision of the Ministry of Health and providing services to non-residents in Türkiye, 50% of the income derived exclusively from these activities is deducted from the income tax base. In order to benefit from this deduction, the invoice or similar document must be issued on behalf of the customer abroad (Income Tax Law Art. 89/13).
Corporate taxpayers (e.g. companies such as A.Ş., Ltd. Şti.) operating in the field of health subject to the permission and supervision of the Ministry of Health can deduct 50% of the income derived exclusively from these activities from the corporate tax base as a result of providing services to non-residents in Türkiye (KVK (Art. 10/1-ğ).
With the regulation included in the omnibus law, which was recently submitted to the Grand National Assembly of Turkey by AK Party deputies and enacted into law, the rate of deduction from the tax base will be applied as 80%, provided that all of the earnings obtained until the date when the income or corporate tax returns for the year in which the health tourism income is obtained must be submitted to Turkey. The regulation increases the rate of earnings subject to the exemption, however, the exemption is conditional on bringing all of the earnings to Türkiye.
VAT exemption
Preventive medicine, diagnosis, treatment and rehabilitation services provided exclusively within health institutions and organizations by real or legal persons authorized by the Ministry of Health to foreign nationals who are not resident in Türkiye are exempt from VAT (VAT Law Art. 13/1-l).
Businesses providing health services within the scope of VAT exemption
In addition to hospitals (public, private, university), medical centers, polyclinics, family and community health centers, clinics, laboratories, institutions, private health institutions providing oral and dental health services, ambulance services, dialysis centers, physical therapy and rehabilitation centers, genetic family and community health centers, medical practices, laboratories, institutions, private health institutions providing oral and dental health services, ambulance services, dialysis centers, physical therapy and rehabilitation centers, diagnostic centers for genetic diseases, private health institutions providing hyperbaric oxygen therapy, hemoglobinopathy diagnostic centers, substance abuse treatment centers, assisted reproductive treatment centers, therapeutic apheresis centers, traditional and complementary medicine application centers, cord blood banks and spas.
In this context, services provided for aesthetic purposes (hair transplantation, skin care, wrinkle treatment, filler applications) and services such as accommodation, transportation and meals are not covered by the exemption.