What is Law No. 4691?

Law No. 4691 is the Law on Technology Development Zones. This law has extended the incentives that can be obtained in Technology Development Zones until the end of the year 2028. It has imposed a condition for corporate tax payers to invest in venture capital funds. It has been stated that in the case of such an investment, the tax will be collected on 20% of the annual income. It has brought a regulation aimed at increasing the number of support personnel for initiatives with a total workforce of fewer than 15. It has provided additional support for doctoral students or interns to be employed in Technopark regions.

What is a Technopark?

Technology Development Zones are referred to as Technoparks. These areas are home to companies that use advanced technology or wish to produce new technologies. These companies benefit from certain universities or the facilities of advanced technology institutes. Similarly, these companies also benefit from advanced technology institutes or R&D centers or institutes. This allows these companies to produce and develop technology or software. It also transforms an invention in the technology field into a commercial product, method, or service. They operate with this goal in mind. In short, Technopark areas are where universities, R&D centers, advanced technology institutes, or both social, economic, and academic structures are integrated within or near these areas.

What are the Advantages of Technoparks?

Companies and firms included in Technopark lead technological innovations. Thus, they continue their activities. The main goal here is to support companies in production processes. This, in turn, supports the development of companies and increases their competitiveness. Innovation is also one of the main goals of these regions. Firms located here acquire new technologies and learn about both new opportunities and new technologies. Technoparks have significant benefits for the country as well. Because these regions increase employment and significantly contribute to the budget. On the other hand, they also facilitate the arrival of many new technologies to the country.

What is the Amount of Cancellation Under Law No. 4691?

The income tax exemption implemented by Law No. 5746 has been changed with Law No. 4691. In this system, the income tax declarations separated from wages were canceled later on the declaration forms. With Law No. 4691, income tax exemptions on wages have started to be applied in Technology Development Zones. However, there are no deductions or separations from wages in these cases. However, this situation has changed starting from March 2021.

What are the Incentives of Law No. 4691?

With Law No. 4691, various incentives have been put into place for technopark regions. The first of these is the exemptions created against income and corporate taxes. This is also referred to as profit exemption. In addition, income tax exemptions applied to wages have also been created as an incentive. At the same time, employer support from the Social Security Institution has been implemented. The exemption from Value Added Tax (VAT) is also another significant incentive in this context. The exemption from customs duties introduced by Law No. 4691 is yet another incentive. One of the most important incentives introduced by Law No. 4691 is the rule that the VAT exemption also applies to the purchase of equipment and new machinery.

What is the Regulation of Law No. 4691?

According to this regulation, many different incentives have been introduced for the companies located in Technology Development Zones. Additionally, the tax exemptions for the companies here have been extended until the end of 2028. This will accelerate the establishment of Technoparks across the country and increase the employment rate in existing Technoparks. This situation is of great importance for both the country as a whole and for technological innovations. According to this regulation, the earnings of companies acting as managers in technology zones are exempt from income tax. These earnings are primarily sourced from jobs related to the establishment of these zones.

How is Payroll Calculated Under Law No. 4691?

The wages of individuals working in Technology Development Zones are calculated on a daily basis. In the initial calculation process, exemptions and taxes are not included in this calculation. SGK declarations are made over the payrolls calculated in this way. Later, net salaries are calculated as gross net amounts. However, in this situation, both income tax and stamp tax exemptions should be taken into account. Payrolls are created based on the wages considered while making these calculations. Withholding declarations are also made based on these calculated payrolls.

Income Tax Exemption Under Law No. 4691

This exemption targets income and corporate tax payers located within the region. The income generated by the technologies produced in these zones is exempt from income and corporate taxes for a period of 5 years from the date they start working. This situation is quite encouraging for the companies and personnel working in these areas.

Until When is the Software Design and R&D Profit Exemption Valid According to Law No. 4691?

With Law No. 4691 on Technology Development Zones, many incentive innovations have been brought for Technopark employees, entrepreneurs, and companies. The aim of these incentives is to increase the number of Technoparks in Turkey and to boost the number of companies and personnel located in these Technoparks. According to Law No. 4691, the Software Design and R&D Profit Exemption is valid until December 31, 2023.

What are the Technology Development Zones under Law No. 4691?

According to the Ministry of Industry and Technology of the Republic of Turkey, the number of Technology Development Zones in Turkey is 93. 79 zones are actively operating. Infrastructure work is still actively being carried out in the remaining 14. The total number of firms and companies located here is 7,944. A total of 81,283 personnel are employed by these firms. 1,694 of these firms have been established by academics. In terms of foreign capital, there are a total of 326 companies with foreign partners within these firms.

What is the Scope of Law No. 4691?

This law is primarily a Value Added Tax (VAT) exemption. This law targets companies located in regions established for the purpose of technology development. It aims for the income and corporate taxes of the profits obtained by these entrepreneurs to be exempt. As long as this exemption process continues, the management systems, business applications, military, sectoral, mobile and internet applications, software, data management services produced by the entrepreneurs in these areas are primarily exempt from VAT.

Which Employers Operate Under Law No. 4691?

There are certain institutions known as employers operating under Law No. 4691. These institutions include R&D Centers or Institutes, Entrepreneurs, managing companies, and production units. R&D Centers or Institutes must possess the trained human resource potential in the public domain. At the same time, they must have machines equipped with innovative technologies and modern software. Production units operate in a way that aligns with the objectives of Law No. 4691 in the region. They are established by real or legal persons. These companies are based on technology and have production units that do not harm the environment. Managing companies are also established as a corporation in accordance with the law. On one side, they are responsible for the management and operation of the regions they are within. Entrepreneurs aim to benefit from both the services and opportunities of these technology regions. Again, these entrepreneurs can be real or legal persons.

Application Methods of Law No. 4691 on Technology Development Zones

In Turkey, the Law on Technology Development Zones (TGBs), Law No. 4691, was published in the Official Gazette on July 6, 2001. The law provides participating companies with a series of income and corporate tax exemptions and promotes entrepreneurship and technological creativity. The law also encourages information exchange and collaboration among companies, universities, and R&D centers in the regions.

The application process for Law No. 4691 is relatively straightforward. Relevant parties must first understand the requirements of the law, including tax exemptions, interest rates, loan conditions, and other conditions such as credit score and collateral requirements. Then, all necessary documents must be gathered to prove identity, income, and other financial information. The application can subsequently be submitted online or in person to the relevant authority. The application is evaluated by the Evaluation Board within 30 days. If approved, the funds will be deposited into the debtor's account, and the company can begin operations in the region.

In conclusion, the 4691 Law on Technology Development Zones in Turkey provides a series of income and corporate tax exemptions for participating companies that promote entrepreneurship and technological creativity. The application process is relatively simple and requires relevant parties to gather the necessary documents and submit their application online or in person. If approved, funds are deposited into the debtor's account, and the company can begin operations in the region.

VAT Exemption Under Law No. 4691 on Technology Development Zones

The Law No. 4691 on Technology Development Zones (Law No. 4691) provides a series of income and corporate tax exemptions for participating companies in Turkey. One of the most significant tax exemptions is the Value Added Tax (VAT) exemption. Companies located in Technology Development Zones are exempt from paying VAT on the goods and services they purchase if they meet the conditions specified in the law.

The law stipulates that companies must meet specific criteria to benefit from the VAT exemption. These include having a minimum capital of 50,000 TL, having a registered office in the Technology Development Zone, and employing at least 10 individuals. Additionally, the company must be involved in research and development activities, technological innovation, software development, or design applications.

The VAT exemption is significant since it allows companies to reduce their costs, increase their competitiveness, and enhance their profits. Furthermore, it helps create employment by promoting the establishment of new businesses in the region and encourages economic growth.