R&D Incentives in Turkey - Altaş Kurumsal Danışmanlık

Research and Development Incentives in Turkey

R&D Incentives in Turkey are aimed at encouraging innovation, fostering technological advancements, and boosting the country’s competitive edge in the global market. These incentives apply to businesses involved in R&D activities, including startups, SMEs, and larger corporations. The incentives are part of Turkey’s broader strategy to transition toward a more technology-driven economy and encourage investment in innovation.

Here are the key research and development incentives in the country:

1.Corporate Tax Exemptions

Corporate Tax Exemption for R&D Income: Companies engaged in R&D activities can benefit from a corporate tax exemption on income generated from their R&D projects. This allows businesses to reinvest their profits back into the R&D process without being heavily taxed.
Reduced Corporate Tax Rates: In certain cases, businesses can benefit from a reduced corporate tax rate on income derived from R&D activities. For example, income related to technology development activities may be taxed at a lower rate.

2.Exemptions for R&D Personnel

Income Tax Exemption for R&D Employees: Employees working in R&D and software development in Technology Development Zones (TDZs), Organized Industrial Zones (OIZs), and other designated areas may benefit from an income tax exemption.
Social Security Premium Exemption: Companies conducting R&D activities are often eligible for social security premium exemptions for their R&D personnel. This helps reduce the overall costs of hiring highly skilled R&D employees.

3.R&D and Innovation Support Programs

TÜBİTAK Support Programs: TÜBİTAK (The Scientific and Technological Research Council of Turkey) provides grants, loans, and financial support to businesses and research organizations involved in R&D activities. TÜBİTAK programs include:
1501 R&D Projects Support Program: A grant program designed to support companies undertaking applied R&D to develop new products and technologies.
1507 Small and Medium Enterprises (SME) R&D Support Program: Provides financial support to SMEs engaged in R&D activities.
1601 Industrial Research and Development Projects Support Program: Focuses on large-scale industrial projects with an emphasis on R&D activities in advanced technologies.
1512 Technological Entrepreneur Support Program (BiGG): A program aimed at entrepreneurs and startups working in the field of technology and innovation, providing financial support for initial research and technology development.

4.Investment Incentives

Incentive Certificates: Companies engaged in R&D activities can obtain an incentive certificate under the Investment Incentive Program. This certificate grants companies tax exemptions (including VAT exemptions), customs duty exemptions, and investment allowances for specific R&D equipment and machinery.
Free Zones: Companies operating in Free Zones (including Technology Development Zones) enjoy several tax advantages, such as exemptions from corporate tax on income generated from R&D activities, and VAT exemptions for imported goods used in R&D.

5.R&D Expenditure Deductions

Deduction of R&D Expenditures: Businesses are allowed to deduct R&D expenses from their taxable income, including costs related to research staff, research equipment, lab materials, and patent fees. These deductions help reduce the overall tax burden on companies investing in R&D activities.
Increased Deduction for R&D Investments: Certain R&D investments (such as investments in high-tech equipment or technology patents) may qualify for accelerated depreciation, which allows companies to deduct a larger percentage of these costs in the short term.

6.Intellectual Property Incentives

Patent Incentives: Companies that file for patents in the country can benefit from various financial incentives, such as reduced fees for patent registration and extension. There are also tax exemptions for income derived from patented technologies.
R&D Tax Credits for Patents and Software: Businesses engaged in the development of innovative products, software, or patented technologies may be eligible for tax credits, which can further reduce the overall tax liability on the income derived from these innovations.

7.KOSGEB Support for R&D

KOSGEB (Small and Medium Enterprises Development Organization) provides financial support, loans, and consulting services to SMEs that are undertaking R&D projects. These include:
SME Technology Development Program: Support for SMEs focused on creating new technologies, products, or services.
Technology and Innovation Support Programs: Specific financial products that assist in R&D activities in industrial design, technological improvement, and innovation-driven business activities.

8.R&D Centers Incentives

Establishment of R&D Centers: Companies can benefit from tax exemptions and subsidies when they set up R&D centers in the country. Such centers can qualify for government funding, subsidized R&D costs, and even financial aid for equipment purchases.
TÜBİTAK’s R&D Center Support Program: This program helps businesses that establish dedicated R&D centers with grants and loans to finance innovation activities and ensure the commercial success of newly developed technologies.

9.Subsidized Technology Training Programs

Technological Skills Development: There are subsidized training programs designed to enhance the technical skills of employees working in R&D roles. These programs aim to improve Turkey’s innovation capacity and workforce competency in high-tech fields.

10.Tax Exemptions for R&D Equipment

VAT and Customs Duty Exemptions: Companies involved in R&D activities are eligible for VAT exemptions for R&D equipment, and customs duties may be waived for imported materials used directly in research. This applies to equipment, machinery, and raw materials that are essential for R&D processes.

11.Export Incentives for R&D-Based Products

Export Credit and Insurance: Companies that produce innovative, high-tech products through R&D can benefit from export credit guarantees and insurance provided by organizations like Eximbank, which encourage Turkish exports of technology-intensive products.

12.National and International Collaboration Programs

International R&D Cooperation: Turkey encourages collaborative R&D projects through programs that involve both Turkish and foreign companies or universities. These programs provide co-financing, grants, and partnership opportunities for joint research efforts that contribute to Turkey’s technological advancements.

R&D incentives in Turkey are a significant driver for fostering innovation and the development of new technologies. With a combination of tax exemptions, financial grants, support for intellectual property, and access to international cooperation programs, Turkey has created an attractive ecosystem for companies looking to engage in research and development. These incentives are designed to encourage high-tech innovation, boost the country’s global competitiveness, and create an environment where companies, especially in technology-driven sectors, can thrive and grow. Whether you are an entrepreneur, an established business, or a research institution, Turkey offers a comprehensive set of incentives to support R&D activities, and these opportunities are poised to play a key role in the country’s continued development as a technology and innovation hub. Please feel free to contact us for more information and further inquiries about our unique services. You can also subscribe to Tacirsoft Hukuk Bilgi Sistemi, that is Turkey’s only Corporate Law and OIZ Law database.