R&D and Design Centers Incentive Program (Law No. 5746)

R&D and Design Centers (Law 5746) — Incentive

Funds Turkey research design centers through science and technology tax support for practical deployment and measurable impact.

Turkey's Ministry of Industry and Technology (MoIT) administers a continuous tax incentive framework under Law 5746 for companies that hold certified R&D Center or Design Center status. Once MoIT certification is obtained — requiring approximately 15 full-time R&D personnel for an R&D Center or approximately 10 personnel for a Design Center — the company may deduct 100% of qualifying R&D and design expenditures from corporate tax. An additional 50% deduction is available where R&D spending grows by 20% or more year-over-year, or where the company meets IP commercialisation or product-launch thresholds. These incentives are confirmed valid through 31 December 2028.

The personnel cost benefits are substantial: income tax exemptions of 80–95% apply to salaries of R&D, design, and support staff, depending on their qualification level. Researchers with PhD or master's degrees enrolled in Ministry-supported programmes receive a 95% income tax exemption; those with master's or undergraduate qualifications under supported programmes receive 90%; all others receive 80%. The employer's share of social security contributions for qualifying personnel is covered by the government. Distinct from Teknopark (Law 4691) benefits, the R&D and Design Center incentive is location-agnostic — the company does not need to reside in a designated zone, only maintain MoIT certification. From 2022 onward, companies whose annual R&D deduction exceeds TRY 1 million must invest a portion of the tax benefit into Turkish startups or venture capital funds.

The incentive operates on a continuous-claim basis through annual corporate tax returns and does not require periodic applications or competition entries. Certification is issued by MoIT's General Directorate of Strategic Research and Productivity. Companies most positioned to benefit are those in technology-intensive industries — including AI, advanced manufacturing, biotechnology, energy, and materials — with established in-house R&D teams that can sustain the personnel headcount threshold and demonstrate qualifying expenditure through audited accounts.