Patent Box, Super Deduction, Tax Exemptions and R&D Grants

A variety of incentives are offered in support of research and development activities, including a patent box regime, super deduction, tax exemption and grants.

Description of Incentive

The following incentives are offered by the Turkish government:

  • R&D and Design Deduction – all costs related to design and innovation in R&D projects are deductible. Qualifying projects contain activities with the main purpose of reach technological innovation.
  • Income tax withholding incentive – Wages given to R&D, design and support personnel are exempt from income tax. Rates vary from 80% – 95% depending on the education level of the personnel.
  • Super Deduction – If a company incurs more R&D costs than they did the previous year, they are eligible for an additional 50% deduction of the R&D cost increase over the previous year.
  • Stamp duty exemption – Papers created for R&D activities or for R&D personnel may be exempt from stamp duty.
  • Income tax exemption – Grants given for the purpose of assisting R&D activities and projects are not subject to income tax.
  • Patent Box – Profits generated from inventions and software development that are a result of R&D conducted in Turkey by corporate taxpayers may be reduced by 50%.

Eligibility Requirements

Turkey has a broad eligibility criteria and all industries may qualify for the R&D incentives. Qualified expenditure must be incurred within Turkey. Eligibility is determined by the type of activities conducted within Turkey. Qualified activities include:

  • Activities performed to develop technological innovation
  • Software activities performed to create new products and ideas
  • Design work in support of R&D activities

Typical eligible costs include:

  • Gross wage of R&D/marketing staff
  • Cost of new equipment and materials relating to R&D
  • Cost of goods/materials/R&D services purchased from third parties
  • Depreciation of equipment used in R&D projects

Other Considerations

The amount of the R&D benefit is capped, but the benefit can be carried forward until fully utilized. The activities claimed as R&D must be certified by a sworn fiscal consultant to be eligible.


Swanson Reed offers the following services:

  • Advice on tax preparation relevant to claiming the R&D tax credits incentive
  • Preparation of documents relating to filing and substantiating a R&D taxation claim
  • R&D tax advice and consultations
  • R&D tax claim planning and preparation

For a full range of services in relation to the credit, please click here.