With amendments on Law No. 7263, certain changes and amendments were made in Law No. 4691 on Technology Development Zones and Law No. 5746 on Supporting Research, Development and Design Activities and these amendments are published and entered into force in the Official Gazette dated February 3, 2021.
Amendments Under Law No. 4691.
• The date to benefit from allowances and incentives is expanded until 31/12/2028.
• Starting from 01/01/2022, taxpayers with 1,000,000 TL or higher income specified in the annual declaration shall keep the 2% of the exempt amount in a temporary account in the passive and transfer to entrepreneur companies linked to this account by the end of the year (the annual top limit is set as 20,000,000TL). If such investments are not made, 20% of the income in the related year shall be subjected to tax.
• The income tax calculated over the wages of R&D, design and support personnel employed in companies in Technology Development Zones shall be cancelled by deducting the tax accrued on the withholding tax return to be submitted.
• The condition to work in the zone “for at least one year” was removed for the graduate and doctorate student personnel to benefit from income tax withholding for the time spent outside the zone.
• · The amendment includes a provision that the personnel can be assessed under income tax withholding incentive for the time outside the zone without exceeding 20% of the total working hours in terms of income tax withholding incentive for the businesses in the zone. This rate can be increased up to fifty per cent by the President.
• For zone companies with up to 15 personnel, the number of support personnel to benefit from support and incentives is determined as a maximum of 20% of the total personnel number (this was 10%).
• The “intern” definition is amended to Law No. 4691 and companies that employ interns shall be offered with support limited with the allowance on the Ministry budget.
• Support shall be offered with support limited with the allowance on the Ministry budget for 2 years for doctorate student R&D personnel employed by the firms in the zone.
• Amendments Under Law No. 5746.
• The date to benefit from allowances and incentives is expanded until 31/12/2028.
• Starting from 01/01/2022, taxpayers with 1,000,000 TL or higher discount rate in the annual declaration shall keep the 2% of this amount in a temporary account in the passive and transfer to entrepreneur companies or venture capital investment funds linked to this account by the end of the year (the annual top limit is set as 20,000,000TL). If this transfer does not happen, the 20% discount amount on the declaration of the related year shall not be included in the R&D discount of the related year.
• The condition to work in the R&D and design center “for at least one year” was removed for the graduate and doctorate student personnel to benefit from income tax withholding for the time spent outside the zone.
• If the doctorate graduate R&D and Design center personnel gives R&D and innovation classes or if the R&D and design personnel offers mentorship to entrepreneurs in the technology development zones without exceeding 8 hours per week, these efforts can be considered under income tax withholding incentive.
• The amendment includes a providing that the personnel can be assessed under income tax withholding incentive for the time outside the R&G and design center without exceeding 20% (this could be increased to 50% by the President) of the total working hours in terms of income tax withholding incentive for the businesses in the zone.
• The definition of “Basic Sciences” is changed as “Supported Programs” and other programs identified by the Ministry in addition to the programs in the definition are evaluated under “supported programs”.
• The identification period of the conditions specified in the law for R&D centers and Design Centers by the Ministry of Industry and Technology is changed to 3 years instead of at most 2 years.
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