SOLMAZ KÜRESEL GÜMRÜK MÜŞAVİRLİĞİ A.Ş.
COMPENSATORY TAX (TEV)
APPLICATION GUIDE
Revised PEM Rules of Origin
Compensatory Tax Application
Reference No | E-88364507-451.01-001204 21282 |
Publication Date | March 27, 2026 |
Source Institution | Republic of Türkiye Ministry of Trade – General Directorate of Exports |
Prepared By | Solmaz Küresel Gümrük Müşavirliği A.Ş. |
01 The 3 Most Critical Changes
1 | TEV Abolished for Non-Textile Products
The "drawback prohibition" has been lifted for all products outside of Chapters 50–63 (textiles and clothing). Companies exporting these products to PEM member countries with a EUR.1 certificate no longer need to pay TEV. Many sectors, such as machinery, chemistry, metals, food, and the automotive supply industry, are directly affected.
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2 | TEV Continues for Industrial Exports to the EU via A.TR Since the Customs Union relationship between Türkiye and the EU is based on the principle of "free circulation," the TEV application continues unchanged for industrial product exports made to the EU with an A.TR certificate. The Revised PEM does not cover this relationship. |
3 | There Are Exceptions in the Textile Sector — But Conditional As a rule, TEV is still applied to textile and clothing exports (Chapters 50–63). However, 4 different exceptions are available for companies that meet the "full cumulation" requirements. Which of these exceptions applies depends on the structure of the supply chain and the certificate used.
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02 PROCESS FLOW — Step by Step TEV Calculation
To answer the question "Do I need to pay TEV for this export?", follow these steps in order:
Step 1 Identify your export document
Which movement certificate are you using for the export?
A.TR → Only for industrial products to the EU. TEV implementation continues; no further steps are required.
EUR.1 → For countries within the scope of the Revised PEM. Proceed to Step 2.
EUR-MED → Old rules apply specifically to Egypt. TEV is calculated.
Step 2 Check whether the Revised PEM is in force in the country of export
Open the "PEM Türkiye Matrix" on the Ministry of Trade's website. If your country is not on the list or the effective date has not yet arrived, the current TEV application continues.
🔗 ticaret.gov.tr → Dış İlişkiler → AB → Pan-Avrupa-Akdeniz Menşe Kuralları
Step 3 Determine the HS code of your product
Look at the Harmonized System (HS) code of your product:
If it is outside Chapters 50–63. → TEV does not arise. The process is complete.
If it is within Chapters 50–63. → TEV arises. However, is there an exception? Proceed to Step 4.
Step 4 If it is a textile product — check your exception conditions
If one of the following 4 exceptions applies, TEV does not arise:
(b) If the input comes from a PEM country with a EUR.1 and is exported back to the same country
(c) If supplier's declaration + full cumulation in two countries is provided
(d) If extended cumulation is applied to exports to EFTA countries
(e) If multi-stage processing is carried out within the Western Balkans–Moldova group
Step 5 Document the result
Add your assessment regarding whether TEV arises and the justification you rely on to the export file. This documentation can be a lifesaver in the event of an audit.
03 COMPARATIVE TABLES
3.1 TEV Status by Country / Document / Product
| Export Route / Document | Product Scope | TEV Status | Entry into Force | Critical Note |
| EU — A.TR | All industrial | ARISES | Ongoing | Customs Union; Revised PEM has no effect |
| EU — EUR.1 (ECSC) | Coal & Steel | DOES NOT ARISE | 01.01.2026 | Outside 50-63; prohibition lifted |
| EU — EUR.1 (1/98 Agriculture) | Agricultural Products | DOES NOT ARISE | 01.01.2026 | Outside 50-63; prohibition lifted |
| EFTA + Faroe — EUR.1 | Outside 50-63 | DOES NOT ARISE | 01.01.2026 | 2025 with "Issued Retrospectively" endorsement: "REVISED RULES" phrase is mandatory on EUR.1 |
| EFTA + Faroe — EUR.1 | 50-63 Textile | EXCEPTION | 01.01.2026 | Check full cumulation conditions — Agreement Section 04 |
| Palestine, Morocco, Bosnia-Herzegovina, Kosovo, N. Macedonia, Montenegro, Georgia | Outside 50-63 | DOES NOT ARISE | 01.01.2026 | — |
| Serbia — EUR.1 | Outside 50-63 | DOES NOT ARISE | 13.02.2026 | — |
| Moldova — EUR.1 | Outside 50-63 | DOES NOT ARISE | 20.02.2026 | — |
| Egypt — EUR.1 | Outside 50-63 | DOES NOT ARISE | 26.02.2026 | If EUR-MED is used, old rule applies → TEV ARISES |
| Egypt — EUR-MED | All Products | ARISES | 26.02.2026 | Bilateral transitional period — choice of document is critical! |
| Albania — EUR.1 | All Products | PARTIAL | 01.01.2026 | Bilateral cumulation - TEV ARISES for inputs originating from third countries |
| Tunisia — EUR.1 | All Products | ARISES | Ongoing | Negotiations are underway |
| All the above countries | 50-63 Textile | EXCEPTION | — | Check exception conditions in Section 04 of the Agreement |
3.2 Chapters 50–63 (Textile) — Summary of Exception Conditions
| Paragraph | Exception Name | Condition | Example Scenario | Result |
| (b) | Originating Input | Textile arriving from a PEM country with EUR.1 → processing in TR → return export to the same country | Fabric originating from Bosnia → shirt in Türkiye → EUR.1 to Bosnia | NO TEV — input is considered "originating" |
| (c) | Full Cumulation | Supplier's declaration + processing in two countries → acquisition of Turkish origin → EUR.1 to the sending country | Yarn from Pakistan → fabric in Bosnia → shirt in Türkiye → EUR.1 to Bosnia | NO TEV — full cumulation achieved |
| (d) | Extended Cumulation (EFTA) | By unilateral decision of EFTA: Supplier's declaration from PEM country + processing in Türkiye = Turkish origin → EUR.1 to EFTA | Yarn from Pakistan → fabric in Bosnia → shirt in Türkiye → EUR.1 to Norway | NO TEV — EFTA extended the cumulation |
| (e) | Multi-Stage Processing (Balkans) | Processing in multiple countries within the Western Balkans/Moldova group (even if it doesn't acquire origin) + completion in Türkiye → Turkish origin | Yarn from Pakistan → texturing in Bosnia → dyeing in Montenegro → fabric in TR → EUR.1 to Montenegro | NO TEV — intra-group processes are deemed to have been carried out in Türkiye |
3.3 Revised PEM Timeline of Entry into Force
| Date | Development | Affected Countries |
| 07.12.2023 | PEM Joint Committee Decision No. 1/2023 — Revised PEM was established | All PEM countries |
| 19.12.2025 | Presidential Decision No. 10694 — Entry into force in Türkiye | Türkiye |
| 20.12.2025 | Implementing Regulation published in the Official Gazette | Türkiye |
| 01.01.2026 | Revised rules active — No TEV on exports outside 50-63 | EFTA, Faroe Islands, Palestine, Morocco, Bosnia-Herzegovina, Kosovo, N. Macedonia, Montenegro, Georgia, Albania |
| 13.02.2026 | Revised rules active — No TEV on exports outside 50-63 | Serbia |
| 20.02.2026 | Revised rules active — No TEV on exports outside 50-63 | Moldova |
| 26.02.2026 | Revised rules active — No TEV on exports outside 50-63 via EUR.1; old rule continues via EUR-MED | Egypt |
⚠️ Legal Disclaimer: This guide has been prepared by Solmaz Küresel Gümrük Müşavirliği A.Ş. based on the letter of the Republic of Türkiye Ministry of Trade dated 27.03.2026 and numbered E-88364507-451.01-00120421282, and is for informational purposes only. For specific transactions, the current legislation and expert opinions must be taken as a basis. |