Law No. 4691 on Technology Development Zones
What is Law No. 4691?
Law No. 4691 is the Law on Technology Development Zones. This law extended the incentives that can be obtained in Technology Development Zones until the end of 2028. It has imposed a condition for corporate tax payers to invest in entrepreneurial funds. In the case of such investment, it is stated that tax will be levied on 20% of the annual profit. It introduced a regulation that aims to increase the number of support personnel for enterprises with fewer than 15 employees. It also provides additional support for doctoral students or interns to be employed in Technopark areas.
What is Technopark?
Technology Development Zones are expressed as Technopark. These areas include companies that use advanced technology or want to produce new technologies. These companies benefit from certain universities or the facilities of advanced technology institutes. Similarly, these companies also benefit from research and development centers or institutes. In this way, these companies produce and develop technology or software. It transforms an invention in the field of technology into a commercial product, method, or service. They operate for this purpose. Thus, they contribute to the development of the region. In short, Technopark areas are places where universities, R&D centers, advanced technology institutes, and both social and economic and academic structures are integrated within or near them.
What are the Advantages of Technopark?
Companies and firms included in Technopark lead technological innovations. Thus, they continue their activities. The main aim here is to support companies in their production processes. This also helps firms to develop and increase their competitiveness. Innovation is also one of the primary goals of these regions. Companies located here acquire new technologies and become aware of both new opportunities and many new technologies. Technoparks have significant benefits for the country. Because these areas increase employment and thus make a significant contribution to the budget. On the one hand, they facilitate the introduction of many new technologies to the country.
What is the Amount Cancelled Under Law No. 4691?
With Law No. 4691, the income tax exemption introduced by Law No. 5746 has been changed. In this system, income tax statements separated from wages were later canceled on their respective declarations. With Law No. 4691, income tax exemptions on wages started to be applied in Technology Development Zones. However, no deductions or separations are made from wages. This situation has changed starting from March 2021.
What are the Incentives Provided by Law No. 4691?
Various incentives have been implemented for technopark regions with Law No. 4691. The first of these is the exemptions created against income and corporate taxes. This is also referred to as profit exemption. In addition, exemptions applied on income taxes for wages have been created as an incentive. At the same time, employer support from the Social Security Institution has been implemented. The Value Added Tax exemption is also included in this context as an important incentive. The exemption from customs duties introduced by Law No. 4691 is another incentive. One of the most significant incentives brought by Law No. 4691 is the rule that applies the value-added tax exemption for the purchase of equipment and new machinery.
What is the Regulation of Law No. 4691?
According to this regulation, many different incentives have been implemented for companies located in Technology Development Zones. In addition, the tax exemptions for companies here have been extended until the end of 2028. With this, the opening of Technoparks within the country will accelerate and the employment rate in existing Technoparks will also increase. This situation is very important for both the country as a whole and for technological innovations. In this regulation, the profits of companies acting as managers in technology zones are exempt from income taxes. These profits primarily arise from businesses related to the establishment of these regions.
How is a Payroll Calculated Under Law No. 4691?
The salaries of individuals working in Technology Development Zones are calculated daily. In the initial calculation process, exemptions and taxes are not included in this calculation. SGK declarations are made based on these calculated payrolls. Then, these net salaries are grossed to arrive at net calculations. However, in this case, both income tax and stamp taxes must be taken into account. The payroll is created based on the wages considered in these calculations. Withholding declarations are also carried out 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 they earn from the technologies produced in these areas is exempt from income and corporate tax for 5 years from the date they start working. This is quite encouraging for companies and personnel working in these areas.
How Long is the Software Design and R&D Profit Exemption Valid According to Law No. 4691?
With Law No. 4691 on Technology Development Zones, many incentives have been introduced for Technopark workers, entrepreneurs, and companies. The aim of these incentives is to increase the number of Technoparks in Turkey and to increase the number of companies and personnel located in these Technoparks. According to Law No. 4691 on Technology Development Zones, 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 in operation. In the remaining 14, infrastructure works are still being actively carried out. The total number of firms and companies located here is 7,944. A total of 81,283 personnel are employed in these firms. Of these firms, 1,694 have been established by academics. In terms of foreign capital, there are a total of 326 companies with foreign partnerships in these firms.
What is the Scope of Law No. 4691?
This law primarily constitutes an exemption from value-added tax. It aims to target companies located in regions established for the purpose of technology development. It is aimed that the profits obtained by these entrepreneurs are exempt from income and corporate taxes. As long as this exemption process continues, the system managements, business applications, military, sectoral, mobile and internet applications, and software services produced by entrepreneurs in these areas are basically exempt from value-added tax.
Which Employers Work Under Law No. 4691?
There are certain institutions defined as employers working under Law No. 4691. These institutions are R&D Centers or Institutes, Entrepreneurs, managing companies, and production units. R&D Centers or Institutes must have qualified human resources potential recognized by the public. They also possess machines equipped with innovative technologies and modern software. Production units operate in a manner that aims at the goals of Law No. 4691 in the region. These are established by real or legal persons. These companies are both technology-based and have production units that do not harm the environment. Managing companies are also established in accordance with the law as joint-stock companies. They are also responsible for the management and operation of the regions they are located in. Entrepreneurs aim to benefit from the services and opportunities of these technology regions. Again, these entrepreneurs can be either legal or real persons.
Implementation Methods of Law No. 4691 on Technology Development Zones
The Law on Technology Development Zones (TDZs) in Turkey, Law No. 4691, was published in the Official Gazette on July 6, 2001. The law provides a series of income and corporate tax exemptions to participating companies and encourages entrepreneurship and technological creativity. The law also promotes knowledge exchange and cooperation between companies, universities, and R&D centers located in the regions.
The application process for Law No. 4691 is relatively simple. Relevant parties must first understand the requirements of the law, which involves understanding tax exemptions, interest rates, loan conditions, and other conditions, such as credit scores and collateral requirements. Then, all required documents must be collected to prove identity, income, and other financial information. The application can then be submitted online or in person to the relevant authority. The application is evaluated by the Evaluation Board within 30 days. If approved, funds will be deposited into the debtor's account and the company may begin operations in the region.
In conclusion, Law No. 4691 on Technology Development Zones in Turkey provides a range of income and corporate tax exemptions to participating companies that encourage entrepreneurship and technological creativity. The application process is relatively straightforward and requires relevant parties to collect necessary documents and submit the application online or in person. If the application is approved, funds are deposited into the debtor's account, and the company can begin operating in the region.
VAT Exemption Under Law No. 4691 on Technology Development Zones
The Law on Technology Development Zones (Law No. 4691) provides a series of income and corporate tax exemptions to participating companies in Turkey. One of the most important tax exemptions is the exemption from value-added tax (VAT). Companies located in Technology Development Zones are exempt from VAT on the purchases of goods and services, provided they meet the criteria specified by the law.
Law No. 4691 stipulates that companies must meet certain criteria to benefit from 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 people. Additionally, the company must be engaged in research and development activities, technological innovation, software development, or design applications.
The VAT exemption is an important incentive as it allows firms to reduce their costs, increase their competitiveness, and boost their profits. It also helps create jobs and promote economic growth by encouraging new business establishments in the Region.
Contents
How Long is the Software Design and R&D Profit Exemption Valid According to Law No. 4691?
What are the Technology Development Zones Under Law No. 4691?
Implementation Methods of Law No. 4691 on Technology Development Zones
VAT Exemption Under Law No. 4691 on Technology Development Zones