Wage Incentive for Personnel Working in R&D or Design Centers

INCOME TAX WITHHOLDING INCENTIVE ON WAGES OF PERSONNEL WORKING IN R&D OR DESIGN CENTERS

The General Communiqué (Serial No. 9) on Law No. 5746 on Supporting Research, Development and Design Activities, published in the Official Gazette No. 31848 dated 27 May 2022, sets out the procedures and principles regarding changes made to the income tax withholding incentive by Articles 20 and 28 of Law No. 7346 dated 21/12/2021.

Under the amendment by Article 28 of Law No. 7346 to Paragraph 2 of Article 3 of Law No. 5746, time spent outside R&D or design centers by personnel working therein – not exceeding 20% of either the total number of personnel or the total working hours subject to the incentive, and excluding the situations specified in the paragraph – will also be considered within the scope of the income tax withholding incentive. The President has authority to increase this 20% ratio up to 75% or reduce it back to the statutory rate for regional and/or sectoral areas to be determined.