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 been made.