Amendments Limiting the Income Tax Withholding Incentive and the Stamp Duty Exemption Under Income Tax General Communiqué Serial No. 331
Amendments Limiting the Income Tax Withholding Incentive and the Stamp Duty Exemption Introduced by Income Tax General Communiqué Serial No. 331
As is known, the “Law Amending the Law on the Protection of the Value of Turkish Currency, Certain Laws and Decree-Law No. 635”, published in the Official Gazette of 24.07.2025, introduced a limitation on the income tax withholding incentive and the stamp duty exemption applicable to the wages of R&D, design, software and support personnel under the third paragraph of Provisional Article 2 of Technology Development Zones Law No. 4691 and under Provisional Article 1 of Law No. 6550 on the Support of Research Infrastructures.
Income Tax General Communiqué Serial No. 331 has now set out the procedures and principles governing these amendments.
Following the amendments made by Law No. 7555, the former and new wording of Provisional Article 2 of Law No. 4691 is as follows:
TECHNOLOGY DEVELOPMENT ZONES LAW NO. 4691 | |
FORMER WORDING | NEW WORDING |
Provisional Article 2 …until 31/12/2028, for the R&D, | Provisional Article 2 …until 31/12/2028, for the R&D, design and support personnel working in the zone, in respect of the duties they perform, the tax amount remaining after deducting, from the income tax calculated on the portion of their wages that does not exceed forty times the gross minimum wage, the tax corresponding to the minimum wage exemption laid down in subparagraph (18) of the first paragraph of Article 23 of Law No. 193; shall be cancelled by being deducted from the tax accrued on the withholding tax return to be filed. |
Following the amendments made by Law No. 7555, the former and new wording of Article 3 of R&D Law No. 5746 is as follows:
LAW NO. 5746 ON THE SUPPORT OF RESEARCH, DEVELOPMENT AND DESIGN ACTIVITIES | |
FORMER WORDING | NEW WORDING |
Deductions, exemptions, support and incentive items Article 3 (2) Income tax withholding incentive: Excluding public personnel, for R&D and support personnel working in technology centre enterprises, in R&D centres, in R&D and innovation projects supported by public institutions and organisations, by foundations established by law or using funds or credits obtained from international institutions or from public institutions and organisations in order to support R&D projects within the scope of technology development project agreements, or supported by international funds or carried out by TÜBİTAK (Scientific and Technological Research Council of Türkiye), in enterprises benefiting from techno-entrepreneurship capital support and in pre-competitive cooperation projects, as well as for the design and support personnel working in design projects and design centres supported by the institutions and organisations listed above within the scope of this Law; of the income tax calculated, after application of the minimum living allowance, on the wages they earn in return for this work; ninety-five per cent for those holding a doctorate or at least a master’s degree in one of the programme fields to be supported, ninety per cent for those holding a master’s degree or a bachelor’s degree in one of the programme fields to be supported, and eighty per cent for the others, shall be cancelled by being deducted from the tax accrued on the withholding tax return to be filed. | Deductions, exemptions, support and incentive items Article 3 (2) Income tax withholding incentive: Excluding public personnel, for R&D and support personnel working in technology centre enterprises, in R&D centres, in R&D and innovation projects supported by public institutions and organisations, by foundations established by law or using funds or credits obtained from international institutions or from public institutions and organisations in order to support R&D projects within the scope of technology development project agreements, or supported by international funds or carried out by TÜBİTAK, in enterprises benefiting from techno-entrepreneurship capital support and in pre-competitive cooperation projects, as well as for the design and support personnel working in design projects and design centres supported by the institutions and organisations listed above within the scope of this Law; of the tax amount remaining after deducting, from the income tax calculated on the portion of the wages they earn in return for this work that does not exceed forty times the gross minimum wage, the tax corresponding to the minimum wage exemption laid down in subparagraph (18) of the first paragraph of Article 23 of Law No. 193; ninety-five per cent for those holding a doctorate or at least a master’s degree in one of the programme fields to be supported, ninety per cent for those holding a master’s degree or a bachelor’s degree in one of the programme fields to be supported, and eighty per cent for the others, shall be cancelled by being deducted from the tax accrued on the withholding tax return to be filed. |
(4) Stamp duty exemption: No stamp duty is levied on papers drawn up in connection with any kind of R&D and innovation activities and design activities falling within the scope of this Law. | (4) Stamp duty exemption: No stamp duty is levied on papers drawn up in connection with any kind of R&D and innovation activities and design activities falling within the scope of this Law. Provided that, in respect of wages, the amount to which the exemption is applied may not exceed forty times the gross minimum wage. |
With the amendments made to Article 3 of Law No. 5746 and to Provisional Article 2 of Law No. 4691, the scope of the previously unlimited income tax withholding incentive and stamp duty exemption granted on a per-employee basis to R&D, design, software and support personnel has been restricted, so that the exemption may now be applied only to the portion of an employee’s wage that does not exceed forty times the monthly gross minimum wage (for 2025
26,005.50 × 40 = TRY 1,040,220). For gross wages above TRY 1,040,220 per month, the exemption applies to the portion below that threshold, while tax will be calculated on the excess portion and declared in the withholding tax return.
Effective Date: The amendments will enter into force at the beginning of the month following publication of the law (1 August 2025), and payrolls for the August 2025 period must be prepared in line with the new rules.
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