On the agenda for the parliament this week will be the Law on Technology Development Zones (TDZs) and the Law Proposal on Amending Some Laws, including a series of regulations in improving ease of doing business and the investment environment. Other regulations up for amendment in the proposal include the removal of the signatory circular, the creation of legislation infrastructure regarding the establishment of companies electronically, preparing documents for tender objections and complaints electronically, the more efficient utilization of chattel mortgage (pledge of movables) in access to are among regulations included in the law proposal.
INCENTIVES IN TDZs EXTENDED TO 2028
The duration of incentives will be extended with the amendment of the law on TDZs. Income generated by managing companies and income earned from software, design and R&D activities in the zone by taxpayers will be exempt from income and corporate taxes until December 31, 2028. Moreover, the employment burden on entrepreneurs in TDZs will be be eased. Accordingly, the income tax calculated after implementation of minimum living allowance through wages of R&D, design and support personnel working in TDZs will be deducted from tax accrued through withholding tax return until December 31, 2028.
Capital support for entrepreneurs Income and corporate taxpayers whose earnings are exempted from the annual declaration and the discount amount benefit from the annual declaration for R&D Centers are one million lira or will temporarily transfer 2% of this amount to a temporary account as of January 1, 2022 to benefit from the incentives, according to the law proposal. Moreover, with this amount, these taxpayers will have to purchase shares of venture capital investment funds launched in order to invest in entrepreneurs in Turkey or to invest in venture capital investment trusts or in entrepreneurs operating in incubation centers.
A regulation has been proposed to ensure that the time spent by relevant personnel outside of TDZs are included in income tax withholding incentive on the condition that they don’t exceed 20% of total working time. This rate can be raised to 50% by the President.