The law numbered 6676 amending "Law on Supporting Research and Development ("R&D") Activities" was published in the Official Gazette dated February 26, 2016 and entered into force as of March 1, 2016 ("Amendment Law"). The purpose of the amendment is to increase the investments made on R&D activities for the production of higher value-added goods, as well as designing activities by means of establishing collaboration between universities and the industry. In this respect, special incentives were introduced by Amendment Law, as listed below:

  • "Designing activities" are included to the R&D incentives: Establishment of design centers will enjoy similar incentives as the R&D centers and the technology development zones ("TDZ"). Furthermore, documents that are drafted in relation to designing activities will also enjoy stamp tax exemption.
  • Income arising from the R&D, innovation and designing activities will be exempt from income tax and corporate tax until December 31st, 2023;
  • The government will support the firms engaged in R&D activities by subsidizing the 50 % of the cost of the machinery and equipment to be used in the R&D factories.
  • Goods delivered to and services rendered in TDZ, will be exempt from Value Added Tax.
  • Goods imported for the R&D, innovation and designing projects will enjoy customs tariff exemption as well.
  • The Ministry of Science, Industry and Technology is entitled to determine on the maximum rent amount to be charged in the TDZs and R&D centers.
  • The minimum number of workers that the companies need to employ for enjoying any R&D incentives has been decreased from 30 workers to 15 workers.
  • Total capital payment support to the employers in the TDZs has been increased from TRY 100,000 to TRY 500,000 (USD 143,570)[1], depending on the type of the R&D project. The amount of this support will be deducted from employers' corporate tax liabilities. Application period to this support has been increased to 10 years from 5 years starting from the founder's graduation from the university.
  • Academicians, who are employed to conduct projects under university–industry cooperation programs, will be exempt from income tax, which will be deducted from the income that they receive from their collaborative works with the industry.
  • The Amendment Law also provides for granting scholarships to the successful students by the Scientific and Technological Research Council of Turkey (TUBITAK) in order to encourage them. Up to 60% of the general expenses of the projects approved by TUBITAK will be covered by the same.

It is expected that the Amendment Law will help to increase the stake of R&D activities in the Turkish economy from 1% to 3% of the country's total GDP in order to reach Turkey's 2023 targets[2]. Foregoing incentives are quite generous and seem to be able to persuade all the interested parties to invest in the R&D activities.

[2] 2023 will be the 100th anniversary of the establishment of the Republic of Turkey.

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