· R&D and Design Law No. 5746 
· R&D discount
· Income tax withholding incentive
· Social Security employer premium support
· Stamp tax exemption
· Customs tax exemption
· VAT exemption in Machinery Purchase tax incentives are offered.

R&D Centre Properties

· Companies established to carry out R&D and innovation projects or contract-based R&D and innovation activities
· Capital companies whose legal or business center is located in Turkey, including the workplaces of limited taxpayer institutions in Turkey,
· Companies organized as separate units inside the organizational scheme,
· Companies involved in research and development activities only at the national level 
· Companies that employee at least 15 full-time equivalent R&D personnel,
· Companies with sufficient R&D know-how and skills, 
· Companies with R&D Centre certificate from the Ministry of Science, Industry and Technology are R&D centers.

R&D centers can undertake both R&D and design projects. Thus, R&D centers can undertake design activities and benefit from design discounts. 
Design centers can only undertake design projects and benefit only from design discounts.
It is possible to establish R&D and design centers in technocities. The allowance and incentive provisions in Law No. 5746 shall be valid. 
Foreign individuals can be employed as R&D or design staff.

R&D centers that employ R&D personnel with at least an undergraduate degree in the basic sciences receive grants corresponding to the monthly gross amount of the minimum wage. R&D centers can benefit from incentives under approved R&D projects.

Design Centre Properties   

Design center:
· Companies established to carry out design and innovation projects or contract-based design and innovation activities
· Capital companies whose legal or business center is located in Turkey, including the workplaces of limited taxpayer institutions in Turkey,
· Companies organized as separate units inside the organizational scheme,
· Companies involved in research and development activities only at the national level 
· Companies that employee at least 10 full-time equivalent design personnel,
· Companies with sufficient design know-how and skills, 
· Companies with Design Centre certificate from the Ministry of Science, Industry and Technology
are defined as design centers.

R&D centers can undertake both R&D and design projects. Thus, R&D centers can undertake design activities and benefit from design discounts. 
Design centers can only undertake design projects and benefit only from design discounts. 
Design centers can benefit from all discounts and incentives provided to R&D centers.

When will R&D activities start and when will these activities end?

The R&D discount will start when the agreement with supported organizations is signed or the project starts. 
It is not possible to apply an R&D discount to any expenses after the incentive or agreement expires. 
The R&D activity ends when the trials come to an end, the initial production is completed or when the project fails. 
The R&D project is deemed to be completed when a marketable product is obtained as a result of an R&D project.
Accordingly, R&D expenses until achieving a marketable product to sell will benefit from an R&D discount since the R&D activity will terminate at this stage.

TAX INCENTIVES

R&D Discount

R&D center expenses are considered as Corporate Tax discount. If the corporation has no income that year, an R&D Discount is not applicable.
R&D discount amount that is not applied due to insufficient income will transfer to following years by indexing for revaluation rate according to Law No. 5746.
The company will not lose its R&D discount since it can be transferred to future years (without duration limitation) and indexing and the company will reserve this right until generating income. Additionally, the R&D discount rate will not decrease against the inflation due to indexing.

R&D Discount Application

Expenses subjected to R&D discount are collected under 6 titles:
1.    Raw material and other material expenses 
2.    Depreciation
3.    Personnel cost 
4.    General cost
5.    Outsources benefits and services
6.    Taxes, levies and charges 
There are important things for these items to be included in the expense.
R&D Centers that match the criteria set by the Cabinet for Additional R&D Discount in R&D Centers can have extra discounts up to 50% of the R&D expense increase compared to the previous year.
Accordingly, any R&D and design center that achieved at least a 20% increase compared to previous years in one of the following indicators can have an extra discount of up to 50% of the R&D expense increase compared to the previous year. 
 
· The share of R&D or design expense among total revenue
· The number of registered national or international patents
· The number of internationally supported projects
· The ratio of graduate degree researchers to the total number of R&D personnel
· The ratio of total researchers to the total number of R&D personnel
· The ratio of the revenue generated from the new R&D product to total revenue

Commissioned R&D Projects

Some of the companies undertake R&D projects for other companies due to their technical capacities and the owner of the incorporeal right belongs to the company that commissions the project. In other words, “commissioned R&D projects” are based on merit.  
R&D centers that work on commissioned projects can benefit from a 50TL R&D discount which normally they would have used 100 TL R&D discounts; the remaining 50TL R&D discount right will be deduced from the declarations of the companies that commission the R&D center.

Income Tax Withholding Incentive

For the wage obtained by R&D and support personnel working in R&D centers, with the exception of public personnel,

· 95% for those with a doctorate and at least a master's degree in one of the basic sciences, 
· 90% for those with a master’s and at least an undergraduate degree in one of the basic sciences,
· 80% for others is cancelled by deducting the tax accrued on the withholding tax return.

The supported programs refer to the mathematics, physics, chemistry and biology undergraduate programs of higher education institutions and other programs with the opinion of the Council of Higher Education. 
The incentive is determined as 95% for individuals who completed graduate programs and 90% for individuals who completed undergraduate programs in these departments.
Until 31/12/2028, 95% for those with a doctorate and at least a master's degree in one of the basic sciences, 90% for those with a master’s and at least an undergraduate degree in one of the basic sciences, 80% for others are cancelled by deducting the tax accrued on the withholding tax return.

Stamp Tax Incentive

All documents related to all types of R&D activities are exempt from stamp tax according to Law No. 5746. 
The payroll of the personnel employed in the R&D center is exempt from stamp tax due to wage payment solely for these duties.
All goods and services purchased under Law No. 5746 are exempt from stamp tax.
The stamp tax exemption shall be applied if the agreement with subcontractors or other individuals are under the scope of approved R&D and innovation activities and any additional document will not be necessary.

Customs Tax Incentive

The goods imported under the R&D center project consists of goods deemed suitable by the Ministry of Science, Industry and Technology to be used in R&D-related activities. 

The R&D centers that will benefit from this exemption shall apply to BSTB via Single Window System E-Application of the Ministry of Customs and Trade. 
The Ministry reviews this application and approves the application on the same day if it is suitable and informs the Ministry of Customs and Trade via Single Window System. VAT Exempt in Machinery and Equipment Purchases

With the clause (m) added to the 13th article of the VAT Law with Law No. 7104, the deliveries of new machinery and equipment for use in R&D, innovation and design activities, and the deliveries made to be used exclusively in their activities are exempt from VAT until 31.12.2022. 
R&D and design centers and research laboratories can benefit from VAT exemption with documents collected from related departments showing that the purchased machinery and equipment will be used in R&D, innovation and design activities.
This will create a consolidating impact for the company in terms of financing.

MAK CPA SERVICES:

To analyze account plans and accounting record systems related to activities under R&D centers and to act as active and guidance consultancy for related topics
To continuously inform about special regulations ad applications and to analyze whether the R&D center complies with the minimum terms and conditions with monthly reports or reports prepared once every 3 months.
To create the application procedures and decisions related to calculated R&D discount under R&D center and to act as active and guidance consultancy for related topics.

· Income Tax 
· Social Security support 
· Stamp tax
· Design discount (corporate tax)
· Customs tax 

To create the necessary system to benefit from VAT exemption and incentives in Machine Equipment Purchases and to act as guidance consultancy.
To offer tax planning and regulation support service uninterruptedly by our company
To review the financial sections of the periodical reports that must be provided to the Ministry of Science, Industry and Technology.