TECHNOLOGY DEVELOPMENT ZONES INCENTIVES

Technology Development Zones are areas designed to support R&D activities and attract investments in high technology. There are currently 63 TDZs in operation.

Advantages of TDZs

-Discount in Determination of Taxable Income

-Reduced Rental Fees for startups in incubation centers

-Income and Corporate Tax Exemption for Earnings

-Tax and Duty Exemptions for Imported Goods

-Employee Income Tax Withholding Exemption

-Supporting the SSI Premium Employer’s Share at the Rate of Half

-Wage Support for the Employment of Personnel with at least a Bachelor’s Degree in Basic Sciences

-VAT Exemption on Software Sales

-Tax Incentives for Venture Capital Investments

-Opportunities for Public Institutions and Organizations and University Personnel to Work in TDZs

-Possibility for University Faculty Members to Establish Companies, Become Partners and/or Take Part in the Management of TDZs

-Ease in Employing Foreign Nationals

-Technological Product Investment Permit

Income and Corporate Tax Exemption for Gains, Income and corporate taxpayers operating in the Zone are exempt from income and corporate tax until 31/12/2028 on their earnings derived exclusively from software, design or R&D activities in the Zone.

Income Tax Withholding Incentive for Personnel, until 31/12/2028, the income tax calculated after applying the minimum subsistence allowance over the wages of R&D, Design and Support Personnel working in the region related to these duties; It is canceled by deducting it from the tax accrued on the withholding tax return to be submitted. The number of support personnel who will benefit from the incentives related to income tax withholding and insurance premium employer’s share cannot exceed 10% of the total number of R&D and design personnel. This rate is applied as 20% for Regional companies with a total number of personnel up to 15. In the calculation of the number of support personnel, fractional numbers are converted to the next higher integer.

SSI Premium Employer Share Support, Half of the employer’s share of the insurance premium calculated over the wages of the personnel whose wages are exempt from income tax pursuant to the provisional Article 2 of the Technology Development Zones Law No. 4691 dated 26/6/2001 shall be covered from the appropriation to be placed in the budget of the Ministry of Finance.

Reduced Rental Fees for Startups in Incubation Center, The unit square meter rental fees applied to the incubation companies by the zone management company cannot be more than 25% for those with a publicly funded R&D project and 50% for others.

Programs to be Supported Graduate Staff Employment Support, Technology Development Zones companies that employ R&D personnel with at least a bachelor’s degree in the Programs to be Supported in the fields of mathematics, physics, chemistry, biology undergraduate programs of higher education institutions and the fields to be announced by the Ministry upon the opinion received from the Higher Education Council, the monthly gross amount of the monthly minimum wage applied for that year of the monthly wage paid to each of these personnel is covered from the appropriation to be placed in the budget of the Ministry for 2 years.

VAT Exemption on Software Sales, 4691 numbered Technology Development Zones according to the Technology Development Zones Law operating in the technology development zone and specialized technology development zone

Value Added Tax Exemption for the Purchase of New Machinery and Equipment, Within the scope of Provisional Article 39 of the Value Added Tax Law dated 25/10/1984 and numbered 3065, the deliveries of new machinery and equipment made exclusively for use in these activities to those engaged in R&D, innovation and design activities in the technology development zone and specialized technology development zone within the scope of the Technology Development Zones Law No. 4691 are exempt from value added tax until 31/12/2022. With the Presidential Decree No. 6583 published in the Official Gazette dated December 21, 2022 and numbered 32050, the said period was extended until December 31, 2024.

Customs Duty Exemption, Goods imported for use in software, R&D, innovation and design projects and related research conducted in the zones within the scope of the Law are exempt from customs duty and all kinds of funds, and the papers issued and transactions made within this scope are exempt from stamp duty and fees.

Stamp Duty Exemption, Until 31/12/2028, the income tax calculated after applying the minimum subsistence allowance on the wages of R&D, Design and Support Personnel working in the region; It is canceled by deducting it from the tax accrued on the withholding tax return to be submitted. The papers issued regarding the wages within this scope are exempt from stamp tax.

Tax Incentives for Venture Capital Investments, To be applied until 31/12/2028, capital supports provided by income and corporate taxpayers to those operating in the Zone to be used in the financing of the projects within the scope of the Law shall be subject to deduction in the determination of commercial income in accordance with Article 89 of the Income Tax Law No. 193 and corporate income in accordance with Article 10 of the Corporate Tax Law No. 5520, not exceeding ten percent of the declared income or corporate income and twenty percent of the equity capital.

Ease in Employing Foreign Nationals, Within the framework of the provisions of the Foreign Direct Investment Law No. 4875 dated 5/6/2003, the International Labor Law No. 6735 dated 28/7/2016 and the relevant legislation, foreign national managers and R&D or Design Personnel with at least a bachelor’s degree may be employed in the zones.

Technological Product Investment Permit, Enterprises, They may make the investment required for the production of the technological product obtained as a result of the R&D or design projects initiated and finalized in the Zone, in any Zone, provided that the managing company finds it appropriate and the Ministry gives permission. The production permits for the technological product subject to the said investment shall be granted by the relevant institution and organization by taking the opinion of the Ministry.

PhD Student Support, Companies located in Technology Development Zones, The Ministry will provide support for two years for the monthly gross amount of the minimum wage for the PhD student R&D personnel they employ after 3/2/2021 (inclusive).

Venture Capital Practices, Income and corporate taxpayers whose exempt earnings over the annual declaration amount to TL 1.000.000 and above shall transfer 2% of this amount to a temporary account in liabilities. The amount to be transferred under this paragraph is limited to TL 20,000,000 on an annual basis.

Remote Working Opportunity for Company Personnel, In line with the flexible working hours and conditions, it has been ensured that the personnel working in the enterprises located in the Zones can carry out some of their activities outside the Zone and benefit from the supports and exemptions provided by the Law in the same way.

Incubation Centers Opened Outside the Regional Areas, Managing companies of technology development zones are allowed to open incubation centers outside the zone within the framework of the conditions to be determined by the Ministry. Within the framework of these conditions, it is aimed for entrepreneurs to benefit from support, incentives and exemptions.