Tax and Social Security Incentives for Enterpreneurs Operating in Technology Development Zones
Many advantages are provided to companies operating in Technology Development Zones:
1. Tax Exemption on Earnings
The earnings of income and corporate taxpayers operating in Technology Development Zones, exclusively derived from software, design, and R&D activities within these zones, are exempt from income and corporate taxes.
2. VAT Exemption on Software Deliveries and Services
Entrepreneurs operating in Technology Development Zones are exempt from Value-Added Tax (VAT) for system management, data management, business applications, sectoral, internet, gaming, mobile, and military command and control application software delivered or serviced exclusively in these zones during the period when their income is exempt from income or corporate tax.
3. Employer’s Share of Social Security Premium Support
For employees whose wages are exempt from income tax under Law No. 4691 on Technology Development Zones, half of the employer’s share of social security premiums calculated on their wages is covered by an appropriation allocated from the budget of the Ministry of Treasury and Finance.
4. Income Tax Withholding Incentive and Stamp Tax Exemption for Employees
The wages of R&D, design, and support personnel working in Technology Development Zones, related to their duties, are subject to an income tax withholding incentive. After deducting the tax corresponding to the minimum wage exemption, the remaining tax is offset against the tax accrued on the withholding tax return. Additionally, documents related to these wages are exempt from stamp tax.
5. Customs Duty Exemption
Goods imported for use in software, R&D, innovation, and design projects conducted in Technology Development Zones are exempt from customs duties and all types of funds. Documents and transactions related to these activities are also exempt from stamp duties and fees.
6. VAT Exemption and Favorable Depreciation on New Machinery and Equipment
The delivery of new machinery and equipment to be used exclusively in R&D, innovation, and design activities in Technology Development Zones is exempt from VAT. Furthermore, machinery and equipment acquired under this scope until 31/12/2024 benefit from favorable depreciation rates.
7. Support for Approved Programs
Technology Development Zone companies employing R&D personnel with at least a bachelor’s degree in approved fields receive financial support. For each such employee, the portion of their monthly salary up to the gross monthly minimum wage applicable for the year is covered by an appropriation allocated from the budget of the Ministry of Industry and Technology for two years.
Approved programs include undergraduate programs in mathematics, physics, chemistry, and biology, as well as other programs determined by the Ministry in consultation with the Council of Higher Education. Additional supported programs include Biochemistry, Biotechnology, Industrial Design, Industrial Design Engineering, Metallurgy and Materials Engineering, and Molecular Biology and Genetics.
8. Support for Ph.D. and Intern Students
Companies in Technology Development Zones employing Ph.D. students as R&D personnel receive support from the Ministry of Industry and Technology. The portion of the monthly salary of these employees up to the gross monthly minimum wage applicable for the year is covered for two years within the limits of appropriations allocated from the Ministry’s budget.
Additionally, companies employing interns under Law No. 4691 are eligible for support within the framework of regulations set by the Ministry, limited to the appropriations allocated from the Ministry’s budget.
Best Regards,
BİLGENER
