Incentives and Supports

Exemptions Provided Under Law No. 4691

Corporate/Income Tax Exemption: Income and corporate tax liabilities of income and corporate tax taxpayers operating in the region for gains obtained exclusively from software and R&D activities in this region are exempt until December 31, 2023.

VAT Exemption on Sales: Entrepreneurs are exempt from value-added tax (VAT) on the delivery and services related to system management, data management, business applications, sectoral, internet, mobile, and military command and control application software produced exclusively in these regions during this period.

Personnel Income (Withholding) Tax Exemption: Salaries, bonuses, and similar incomes of R&D and support personnel working in the region are exempt from all taxes (Income Tax, Stamp Tax, etc.) until December 31, 2023. The number of support personnel eligible for exemption cannot exceed 10% of the number of R&D personnel.

Income (Withholding) Tax Exemption for Personnel Spending Time Outside the Region: Wages related to the time spent by R&D personnel working on R&D/design projects in Technology Development Zones (TDZs) on five specific activities outside the region are fully exempt from income tax withholding. These activities include: 1) Laboratory, analysis, testing, and experimentation, 2) Work conducted in other R&D or design centers, 3) Field research activities, 4) Prototype development activities, 5) Scientific activities limited to personnel involved in the projects.

Income Tax Exemption for Personnel Pursuing Graduate Education: Salaries of R&D or design personnel who have worked for at least one year in businesses located in Technology Development Zones and have spent up to 1.5 years for master’s programs or up to 2 years for doctoral programs outside the region (proportional to monthly class hours) are fully exempt from income tax withholding.

Support for Personnel Expenses in Basic Sciences: If firms operating in Technology Development Zones employ R&D personnel who have graduated in mathematics, physics, chemistry, or biology, the portion of the personnel's salary up to the minimum wage will be covered by the budget of the Ministry of Industry and Technology. However, the support provided to the firm cannot exceed 10% of the total personnel employed in that month.

Customs, Tax, and Stamp Duty Exemption for Imported Inputs: Goods imported for use in R&D/design projects conducted in Technology Development Zones are exempt from customs duties and any kind of taxes and stamp duties.

VAT Exemption on Machinery and Equipment Purchases: Purchases of new machinery and equipment used for R&D, innovation, and design projects in Technology Development Zones are exempt from value-added tax.

Technological Production: Firms located in Technology Development Zones can make the necessary investments for the production of technological products obtained from R&D projects conducted in the region, with the approval of the managing company and permission from the Ministry. The production permits for these technological products will be issued primarily after obtaining the opinion of the Ministry from the relevant institutions and organizations. Activities related to these investments are recorded separately in the mandatory books according to the Tax Procedure Law No. 213. Personnel working on these investments and the profits obtained from these investments will be taxed according to the principles applicable to enterprises outside the region.

Corporate Tax Exemption in Mass Production: Income and corporate tax taxpayers operating in Technology Development Zones are exempt from corporate tax on the gains obtained from the sale of products that they have mass-produced from the software and R&D activities carried out in this region, specifically for portions related to licenses, patents, and similar intangible rights. The identification of the portion of gains related to licenses and patents will be determined according to transfer pricing principles. However, gains from activities such as adaptation, placement, development, revision, and additional software that are not tied to licenses or patents are also considered under the exemption.

Exemptions Provided Under Law No. 5746

SGK Employer Premium Support: For personnel whose salaries are exempt from income tax, 50% of the employer's share of social security premiums calculated on these wages will be covered by the budget of the Ministry of Treasury and Finance until December 31, 2023.