Amendments to the Domestic Goods Communique: A New Era for Software and Domestic Contribution Rate

Domestic Goods Communique Amended: New Rules for Software and Domestic Contribution Rate

A amending communique published on October 15, 2025 introduced significant updates to the Domestic Goods Communique. The regulation marks the beginning of a new era particularly regarding the classification of software as a domestic good, the calculation of the domestic contribution rate, and the reporting of inputs with a low domestic contribution rate.

One of the most notable changes is the addition of the definition of Domestic Contribution Rate Report. Accordingly, for products and inputs whose domestic contribution rate falls below 51 percent, a report may be issued by the relevant chamber or exchange at the request of the manufacturer. This report becomes critical in terms of how certain inputs are to be included in the domestic contribution calculation.

On the software side, the approach has been clarified. For software to be accepted as a domestic good, it is now mandatory to hold a Technology Product Certificate issued by the Ministry. For software holding this certificate, the domestic contribution rate will be accepted as 100 percent. In other words, the classification of software as domestic has been tied to a certificate requirement, simplifying the overall application.

The details of the domestic contribution rate calculation have also been updated. An origin check will be conducted to determine whether inputs sourced domestically are imported or not. If an input is imported, it will be included in the imported input calculation. If the input holds a Domestic Goods Certificate, the portion corresponding to the domestic contribution rate stated in that certificate will be counted as a domestic input. For certain inputs sourced from manufacturers who do not hold a Domestic Goods Certificate but do hold an industrial registry certificate, the rate may be determined by a chamber or exchange report. In addition, a practical mechanism has been introduced whereby inputs that meet certain conditions but whose rate has not been calculated may be counted as domestic at a rate determined by the Ministry based on amount thresholds.

The regulation also directly accepts certain inputs as 100 percent domestic. Items such as electricity, water, and natural gas; intellectual property expenses with first registration in Turkey under certain conditions; and inputs obtained from licensed recycling activities carried out domestically now provide an advantage in the calculation.

The transition timeline is also important. Some provisions enter into force on November 5, 2025, while the remaining provisions take effect on January 1, 2026. Furthermore, for public tenders conducted before January 1, 2026, the application of the previous provisions for domestic contribution rate calculations is left to the discretion of the contracting authority. For this reason, both companies participating in public tenders and manufacturers managing domestic goods certificate processes need to plan carefully for the transition period spanning the end of 2025 and the beginning of 2026.