Venture Capital Fund Investment Obligation

VENTURE CAPITAL FUND INVESTMENT OBLIGATION

As is known, from 1/1/2024 onwards, personal and corporate income taxpayers whose technopark earnings exempted on their annual tax return under Law No. 4691 amount to TRY 2,000,000 or more, and personal and corporate income taxpayers whose R&D deduction claimed on their annual tax return under Law No. 5746 amounts to TRY 2,000,000 or more, must transfer three per cent of the deduction/exemption amount they have benefited from to a temporary account on the liabilities side. This amount must, by the end of the year in which the temporary account arises, be used to purchase units in a venture capital investment fund established to invest in entrepreneurs resident in Türkiye, or be contributed as capital to venture capital investment trusts or to entrepreneurs operating in incubation centres within the scope of Law No. 4691. This investment obligation is capped at an upper limit of TRY 100,000,000 per year.

If the amount in question is not transferred by the end of the relevant year, twenty per cent of the deduction or exemption amount may not be made subject to the personal or corporate income tax exemption benefited from in that year, and the taxes not collected on time in respect of that amount are assessed together with late payment interest, without applying a tax loss penalty.

In this context, we would strongly remind companies with a Technology Development Zone earnings exemption and R&D/Design Deduction of TRY 2 million or more in their 2024 corporate income tax return that they must make the relevant investment before 31.12.2025 and send us the bank receipt for the transaction as soon as possible.

Yours sincerely.