Law No. 5746 on Supporting Research and Development Activities
Objective:
- To support R&D and innovation activities in Turkey,
- To increase the global competitive strength of the national economy,
- To encourage the production of technological knowledge,
- To ensure innovation in products and production processes,
- To support technology-based ventures and increase R&D investments.
Scope:
- Small and Medium-sized Industry Development and Support Administration (KOSGEB)
- Technology Center Enterprises
- R&D Centers in Turkey
- R&D Projects and Pre-competitive Collaboration Projects
- Techno-entrepreneurship Capital Supports
Support Elements for R&D and Innovation Activities
1. R&D Deduction:
All R&D expenditures are subject to deduction in the determination of corporate income.
For centres employing 500 or more full-time R&D personnel, when R&D expenditure increases compared to the previous year, 50% of this increase is taken into account as an additional discount.
Tax advantage: R&D expenditures are amortised through depreciation and carried forward to subsequent periods in case of insufficient earnings.
2. Income Tax Withholding Incentive:
- Salaries of R&D personnel are exempt from income tax withholding:
- 90% exemption for those with a Ph.D.
- 80% exemption for others.
- This incentive applies to technology centers, R&D centers, public institutions, foundations, and projects supported by TÜBİTAK.
3. Employer's Social Security Premium Support:
- 50% of the employer's share of the social security premium for R&D and support personnel is covered by the government.
- This support is provided for 5 years.
4. Stamp Duty Exemption:
- All documents related to R&D and innovation activities are exempt from stamp duty.
5. Techno-entrepreneurship Capital Support:
- Entrepreneurs with technology and innovation-focused business ideas are provided with grant support of up to 100,000 TL.
- Recent graduates from formal education universities, as well as graduate and doctoral students, can benefit from this support.
- Business ideas with high value-added creation potential are encouraged.
6. Pre-competitive Collaboration Projects Support:
- R&D expenditures in projects developed collaboratively by multiple organizations are supported.
- The funds collected in a special account are considered as R&D expenses and cannot be used for purposes other than the project.
7. Publicly Supported R&D Funds and Tax Advantages:
- Support received from public institutions and international funds is kept in a special fund and is exempt from taxes.
- These funds can be added to the working capital for 5 years.
Who Can Benefit?
- R&D centers and technology development zones
- Universities and public research centers
- Technology and innovation-focused SMEs (Small and Medium-sized Enterprises)
- Entrepreneurs benefiting from the tech-entrepreneurship support programs
Implementation and Supervision of the Law
Audits are carried out for a period of 2 years at the latest.
The right to benefit from incentives is determined by averaging the number of R&D personnel.
Those who benefit from the incentives under the Law cannot benefit from other tax incentives of the same nature.
In case of misuse of incentives, the incentives provided shall be withdrawn with default interest.
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