“R&D Deduction and Technopolis Income: 2% Investment Obligation”
As it is known, with the Law No. 7263, the obligation to purchase venture capital investment fund shares for entrepreneurs who earn 1.000.000 TL or more annually within the scope of Laws No. 4691 and 5746 / corporations benefiting from R&D discount, up to 2% of the earnings / discount amount, or to put it as capital to entrepreneurs operating in venture capital investment partnerships or incubation centers within the scope of Law No. 4691.
The implementation of this obligation is summarized below.
1- While the obligation under Law No. 4691 covers income and corporate taxpayers, the obligation under Law No. 5746 covers only corporate taxpayers.
2- In order for the investment obligation in question to occur, the annual earnings within the scope of Law No. 4691, the amount deducted within the scope of Law No. 5746, must be TRY 1.000.000 and above.
3- The amount of investment obligation is 2% of the amount exempted under Law No. 4691 over the annual declaration and 2% of the R&D discount amount utilized under Law No. 5746. However, the amount obligation to be transferred is limited to 20.000.000 TL on an annual basis.
4- This 2% is transferred to a temporary account in liabilities and must be invested until the end of the year in which the temporary account is established.
5- The investment must be made through the purchase of venture capital investment fund shares established to invest in entrepreneurs residing in Turkey or as capital to entrepreneurs operating in venture capital investment trusts or incubation centers within the scope of Law No. 4691.
6- In the event that the said amount is not transferred until the end of the relevant year, 20% of the discount amount deducted on the annual declaration within the scope of 5746 cannot be subject to the R&D discount utilized in the relevant year; 20% of the exempted earnings amount on the annual declaration within the scope of Law No. 4691 cannot be subject to the income and corporate tax exemption utilized in the relevant year. Taxes not collected on time due to this amount are levied without applying tax loss penalty.
Example: ABC Teknoloji A.Ş., which operates in Teknokent, has earned 1.000.000 TL within the scope of Law No. 4691 and declared this amount as an exemption in its Corporate Tax Declaration for 2021.
Pursuant to the regulation, the company is required to transfer TL 20,000, which is 2% of TL 1,000,000, to a temporary account in liabilities and to purchase a venture capital investment fund equal to this amount until the end of 2022 or to put it as capital to venture capital investment trusts or entrepreneurs operating in incubation centers.
If the Company does not fulfill this investment obligation, 20% of TL 1.000.000, which is TL 200.000, will not be considered within the scope of the exemption.
Sincerely,
BİLGENER
