Amendments to the General Communiqués of Law No. 5746 on Supporting Research, Development and Design Activities

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 July 2025, amended Article 3 of Law No. 5746 on Supporting Research, Development and Design Activities.

In parallel with this amendment, introduced by R&D Communiqués Serial No. 10 and Serial No. 11 published in the Official Gazette of 4 September 2025, the same provisions have been added to General Communiqué Serial No. 4, which sets out the explanations on the income tax withholding incentive under Law No. 5746 on Supporting Research, Development and Design Activities, and to General Communiqué Serial No. 5, which covers the stamp duty exemption; the worked examples have also been updated.

Accordingly, under Law No. 5746, the scope of the income tax withholding incentive and the stamp duty exemption granted on a per-employee basis to R&D, design, software and support personnel — previously unlimited — has been restricted, and it is now provided that the incentive is applied to the income tax calculated on the portion of an employee’s salary not exceeding forty times the monthly gross minimum wage (for 2025,
26,005.50*40= TRY 1,040,220) as follows: the tax remaining after deducting the tax corresponding to the minimum wage exemption from that amount; is cancelled by being offset against the tax accrued on the withholding tax return to be filed.

It has likewise been provided that the portion of the documents drawn up in respect of such salaries which does not exceed forty times the gross minimum wage is exempt from stamp duty.

The worked examples set out in the Communiqué under the new rules are as follows:

Example 1: Company (A), a joint stock company, employs 70 full-time R&D personnel and 6 support personnel at its R&D centre, 9 of the R&D personnel holding a doctorate. Mr (B), a PhD-holding employee who started work in September 2025, was paid a gross salary of TRY 1,300,000 in respect of his work within the scope of R&D activities, not exceeding 45 hours per week.

1. The incentive treatment applicable to the salary payment that A.Ş. will make to Mr (B), the PhD-holding employee engaged in R&D work, will be as follows.

Since the salary income of Mr (B), who works at the R&D centre, exceeds 40 times the gross minimum wage for the month concerned, the incentive amount that (A) A.Ş. may benefit from and cancel will be TRY 234,216.52, being 95% of the income tax of TRY 246,543.70 remaining after the income tax corresponding to the minimum wage exemption has been offset against the tax corresponding to 40 times the gross minimum wage (TRY 249,859.40). The income tax of TRY 80,228.11 remaining after the amount to be cancelled and the minimum wage exemption for the month concerned have been deducted from the income tax calculated on that salary [TRY 317,760.33 - (TRY 3,315.70 + TRY 234,216.52)] will be paid to the tax office.

If, in this example, Mr (B) had received the same salary while working more than 45 hours per week, the amount corresponding to his 45 hours of weekly work would be treated as falling within the scope of the income tax withholding incentive, whereas the salary amount corresponding to his work in excess of 45 hours per week would not.

Example 2: In 2025, a design activity carried out by Company (C), a joint stock company, in the industrial field and supported by a public institution is staffed by 4 full-time PhD-holding personnel, 6 technicians and 1 support employee.

In respect of their work within the scope of the design activity, each of the PhD-holding personnel is paid a gross salary of TRY 900,000 and each of the other personnel a gross salary of TRY 450,000.

The salary payments that (C) A.Ş. will make in this context relate to 45 hours of work per week, and the incentive treatment will be as follows.

a) Incentive calculation for a PhD-holding employee who joined the company in September 2025:

b) Incentive calculation for the support employee who joined the company in September 2025:

Since the salary income of the personnel in question working at the R&D centre is below 40 times the gross minimum wage for the month concerned, the incentive that (C) A.Ş. may benefit from and cancel will be calculated — without performing any calculation of the tax corresponding to 40 times the gross minimum wage — on the amount remaining after the income tax corresponding to the minimum wage has been offset against the income tax withheld on the salaries paid to those personnel, within the statutory rates specified in Law No. 5746.

Example 3: Mr (D), a PhD-holding employee working full time at the R&D centre of Company (Ç), a joint stock company, has been paid a gross salary of TRY 1,500,000 per month since January 2025 in respect of his work within the scope of R&D activities, not exceeding 45 hours per week.

The incentive treatment applicable to the salary payment that (Ç) A.Ş. will make to Mr (D) in September 2025 will be as follows.