In line with its high economic growth and its transformation in
to an economic hub in its region, Turkey is recently investing alot
to transform itself in to a center of high tech and R&D.
Turkish economy which is currently capable of producing mid-tech
electronic consumer goods has to transform itself into a high-tech
producing economy in order to continue its economic growth on a
more sustainable basis. The R&D capability is a key for such
transformation and Turkey has lately been investing alot to shift
its economy to that direction. The latest investment incentive
scheme that was adopted in 2012 which categorized the entire
country under six different regions and provide tax and customs
duties exemptions in various different degrees depending on the
region and the industry that the investments are made, is
especially geared towards promoting more R&D in the country.
Within the given context of this R&D promotion in Turkey the
investment scheme provides the investors with important incentives.
If the R&D invsetment provides employment opportunity at least
to 50 people it can benefit from the R&D Law that provides
incentives for the investors. The law includes the following the
advantages for the would be R&D investors;
Stamp duty exemptions
Exemptions from the 50% of the social security premiums for the
employers at least
for five years
Exemption from income withholding tax for the employees
Techno-initiative fund for the scientists that can amount to
100.000 Turkish Liras
For the companies with at least 500 researchers, 100% deduction
of R&D related
expenditure from the tax
The New Benefits
In addition to the benefits provided for the R&D investments
by the latest investment incentive scheme, Turkish authorities are
planning to introduce more benefits for the investors of R&D.
The new draft legislation includes the benefits for the R&D
investments such as VAT breaks for the sale and lease of the new
inventions that included an R&D process. The half of the income
generated from such transaction will be exempt from the corporate
tax and the council of ministers will retain the right to increase
this exemption to 100% of the total income. The draft legislation
even includes the reduction of the minimum number of R&D staff
from 50 to 30 to benefit from the R&D Law benefits in order to
promote more R&D related investments. The council of ministers
will retain the right to make sectoral differentiations with regard
to the number of R&D staff to employ.
It is important to remember that those new additional benefits
are coming on the top of the already existing ones, most
importantly the one that regards R&D investments as investment
priority. Due to such decision the investments for the R&D
projects that are supported by the Ministry of Science, Industry
and Technology, TUBITAK and KOSGEB are able to benefit from the
incentives provided for the region 5 in the new investment
incentive scheme, regardless of the area that the investment had
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