R&D – Muhasebe News

R&D expenses in Turkey increased 5 times in 10 years

MuhasebeNews — Fri, 06 Dec 2019 10:00:31 +0000

R&D expenses in Turkey increased 5 times in 10 years

According to the news published by Istanbul Chamber of Commerce, within the scope of Turkey’s National Technology Move, while R&D ecosystem strengthens, the ratio of R&D expenses to gross domestic product is expected to increase to 1.8 in 2023. This rate was 1.03 last year. In 2009-2018 period, R&D expenses in Turkey were constantly increasing. While total expenditure on R&D in 2009 was approximately TRY 8.1 billion, this amount increased by 5 times in 10 years and by 375% to TRY 38.5 billion as of the end of last year.

Source: Istanbul Chamber of Commerce / Link: https://www.itohaber.com/haber/guncel/210996/ar-ge_harcamalari_10_yilda_5_kat_artti.html
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Gross domestic expenditure on R&D increased 8 billion 678 million in Turkey

MuhasebeNews — Wed, 27 Nov 2019 07:30:02 +0000

Research and Development Activities Survey, 2018

Gross domestic expenditure on R&D reached to 38 billion 534 million TL

Gross domestic expenditure on research and development increased 8 billion 678 million in Turkey and reached to 38 billion 534 million TL in 2018.

Gross domestic expenditure on R&D, 2018
Share of R&D expenditure in Gross Domestic Product (GDP) was 1.03%

While gross domestic expenditure on research and development (GERD) in GDP was 0.96% in 2017, it was 1.03% in 2018.

Gross domestic expenditure on R&D as a percentage of GDP, 2009-2018
The most R&D expenditure was in financial and non-financial corporations

Share of financial and non-financial corporation’s R&D expenditures in total R&D expenditure increased by 60.4%. This sector was followed by higher education by 30.3% and general government included private non-profit by 9.2% respectively.

Gross domestic expenditure on R&D Gross domestic expenditure on R&D
by sectors, 2018 by type of cost, 2018

Financial and non-financial corporations were the first financier

R&D expenditure was financed by financial and non-financial corporations by 53.6% in 2018. This financier was followed by general government by 32.3%, higher education by 12.1%, foreign funds by 2% and other national sources by 0.03% respectively.

172 thousand 119 R&D personnel were employed in terms of full time equivalent

Total number of full time equivalent (TZE) R&D personnel was 172 thousand 119 in 2018. Annual increase in FTE R&D personnel was 12.1% compared to the previous year. Regarding FTE R&D personnel distribution by sectors, 60.6% was employed in financial and non-financial corporations, 32.7% was employed in higher education and 6.6% was employed in general government included private non-profit as well in 2018.

The ratio of female R&D personnel was 31.6% in terms of full time equivalent

Total number of FTE female R&D personnel was 54 thousand 308 in 2018 which constitutes 31.6% of total R&D personnel. When the sectors are considered, the ratio of female R&D personnel in financial and non-financial corporations was 25.6%. This was followed by general government by 28.2% and higher education by 43.3%.

The highest R&D expenditure was in TR51 (Ankara) Region

According to Statistical Regions (SR) Level 2, while R&D expenditure in 2018 was the highest in TR51 (Ankara) region with 32.3%, this region was followed by TR10 (Istanbul) region by 25.3% and TR42 (Kocaeli, Sakarya, Düzce, Bolu, Yalova) region by 10.9%.

According to R&D personnel, TR10 (Istanbul) region by 27.3% was in the first place. This region was followed by TR51 (Ankara) region with 19.5% and TR42 (Kocaeli, Sakarya, Düzce, Bolu, Yalova) region by 7.4%.The next release on this subject will be on November, 2020.

Source: TUIK
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

What action is taken if R&D Support and incentive requirements are violated or if incentives are misused in Turkey?

MuhasebeNews — Mon, 16 Sep 2019 10:00:43 +0000

What action is taken if R&D Support and incentive requirements are violated or if incentives are misused?

In case of violation of the provisions of the Law or the misuse of support and incentives, loss of tax is deemed to have come about in terms of unaccrued taxes on time and loss of taxes are collected together with the delay interest and tax loss penalty. The non-tax supports provided shall be collected by applying the delay interest in accordance with the provisions of the Law No. 6183 on the Collection Procedure of Public Receivables, in Turkey.

Source: GİB
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Central Government Budget Appropriations and Outlays on R&D, 2019

MuhasebeNews — Fri, 19 Jul 2019 14:28:34 +0000

Central Government Budget Appropriations and Outlays on R&D, 2019

Central government budget outlays on R&D amounted to 13 billion 24 million TL in 2018

Central government budget outlays on Research and Development (R&D) activities amounted to 13 billion 24 million TL as in comparison with the previous year increased by 21.6% in 2018. According to this result, Central Government Budget expenditures on R&D accounted for 0.35% of Gross Domestic Product (GDP) and 1.4% of the Central Government Budget expenditure in 2018.

According to provisional results based on initial budget appropriations, Turkey has allocated 15 billion 597 million TL on R&D for the budgetary year 2019.

Indirect R&D support was 4 billion 599 million TL for the year 2018

Total amount of indirect R&D support (R&D tax relieves) was 4 billion 599 million TL for the year 2018.

Central government budget appropriations and outlays on R&D and indirect R&D support⁽¹⁾, 2008-2019⁽²⁾

⁽¹⁾Indirect R&D support was calculated by using the Ministry of Treasury and Finance’s data.
⁽²⁾2019 value based on initial appropriations.

Most important socio-economic objective was General University Funds

The largest share of Central Government Budget appropriations on R&D was directed to the socio-economic objective ‘General advancement of knowledge: R&D financed from General University Funds (GUF)’ with 40.4% for the year 2019. This share was 34.4% for ‘Defense’, 6.8% for ‘Industrial production and technology’, 4.3% for ‘General advancement of knowledge: R&D financed from other sources than GUF’ and 4% for ‘Education’ respectively.

Socio-economic objectives, 2019

The next release on this subject will be in July, 2020.

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EXPLANATIONS

Measuring R&D activities financed by Government (Central Government) based on initial budget appropriations (provisional) and actual outlays (final) are important to identify Government support for R&D or priority of R&D support in Central Government Budget. This covers not only government-financed R&D performed in government establishments, but also government-financed R&D in the other three national sectors (business enterprise, private non-profit, higher education) as well as abroad (including international organisations).

Indirect R&D support covers tax incentives and exemptions based on the Law 193, 5520, 4691, 5746 and 3065. These figures were calculated by using data from the Ministry of Treasury and Finance.

Source: TÜİK
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

What are the Other Incentives Regarding R&D Activities in Turkey?

MuhasebeNews — Tue, 10 Oct 2017 07:00:00 +0000

1- R&D Deduction

R&D expenditures incurred in the enterprises functioning as technology centers,
R&D expenditures incurred in the R&D centers,
Public institutions, R&D and innovation projects supported by public enterprises and establishments, foundations established pursuant to the Law or projects that supported by international funds,
Pre-competition cooperation projects,
Enterprises benefit from the capital support provided to techno enterprises;

All of the R&D and innovation expenditures mentioned above and;

One half of the increase in expenditures compared to the previous year at R&D centers that recruit 500 and more equivalent full-time R&D personnel, are made subject of discount while determining the corporate income and trade income in accordance with article 10 of Corporate Tax Law and article 89 of Income Tax Law.
Besides, these expenditures shall be redeemed by depreciation through the Tax Procedure Law (Law no: 213) When there is no economic asset created, these expenditures shall be directly recorded as an expense. The R&D discount that was not made the subject of discount in the related fiscal year due to the inadequacy of profits can be transferred to the following fiscal years. The transferred amount shall be increased by the revaluation rate determined for each year according to Law No: 213 in the following years. (Law No: 5746 a.3/1)

2- Income Tax Withholding Incentives
Wages of R&D and back-up staff except public servants recruited in the following enterprises are exempt from income tax, at a rate of %90 for staff with PhD degrees, and at a rate of %80 for the other staff:
– Staff recruited in enterprises that function as technology centers,
– Staff recruited in the R&D centers;
– Staff recruited in R&D and innovation projects supported by public enterprises and establishments, foundations established pursuant to the Law or projects that are supported by international funds,
– Staff recruited in R&D and innovation projects undertaken by The Scientific and Technological Research Council of Turkey (TUBITAK),
– Staff recruited in enterprises that are entitled to benefit from the capital support provided to technological enterprises,
– Staff recruited in pre-competition cooperation projects.
Besides, the income tax calculated after applying minimum living discount over wages of R&D and back-up staff stated in the 5746 Numbered Encouragement of Research and Development Law, are cancelled at a rate of %90 for staff with PhD degrees, and at a rate of %80 for the other staff, by deducting from the tax assessed over withholding tax return until 31/12/2013. (Income Tax Law Temporary article 75)

3- Insurance Premium Support
For each employee, one half of the insurance premium of the employer which is calculated over the wages of the R&D and back-up staff gained in the scope of the R&D and innovation activities shall be funded by a budget of the Ministry of Finance for five years. The insurance premium of personnel, whose wages are exempted from income tax pursuant to provisional article 2 of Law numbered 4691 concerning Technology Developing Zones, calculated over their exempted wages and also one half of the employer’s share of insurance Premium shall be funded by a budget of the Ministry of Finance for five years at maximum as long as exemption implemented. (Law No: 5746 a.3/3)

4- Stamp Duty Exemption
All documents drawn up in connection of all types of R&D and innovation activities pursuant to Law Numbered 5746 have been exempted from stamp duty.(Law No: 5746 a.3/4)

5- Techno Enterprise Capital Support
In order to support the transformation of technology and innovation oriented business ideas to enterprises having high potential in creating added value and qualified staff; techno enterprise capital support of up to 100,000 TL shall be granted for once without the demand for a guarantee. The techno enterprise capital support shall be granted to the persons having formal education and will be graduated from any field of universities in one year; master students, doctorate students or had the bachelor, master or doctorate degree maximum five years ago before the pre-application date. (Law No: 5746 a.3/5)

Source: Revenue Administration

Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.

Expenses that will be deducted from Company’s Earnings!

MuhasebeNews — Tue, 16 May 2017 10:34:22 +0000

1- DEDUCTIBLE EXPENSES ACCORDING TO INCOME TAX LAW
Income is taxed through net profit.
In order to determine the net profit, the expenses stated below should be accepted to deduct:
1- General expenses
2- Expenses related to the staff
3- Losses, damages and indemnities related to work
4- Travel and residence expenses
5- Vehicle expenses
6- Tax-in-kind, levies and charges
7- Amortizations
8- Fees paid to employers’ associations
9- Fees paid for personal retirement insurance
10- Donations made to associations and foundations making food banking

2- DEDUCTIBLE EXPENSES ACCORDING TO CORPORATE TAX LAW
In the determination of company’s income calculated like commercial income, a tax payer can deduct expenses stated below from its revenue.

1- Stock certificates and export cost of bonds
2- Incorporation and organizational costs
3- General meeting, business combinations, denouncement and liquidation costs
4- Insurance costs
5- Profit shares of partnership of commendams
6- R&D discount
7- Creditors without interest-fee and profit shares paid to private financial institutions

3- LOSS OFFSETTING AND OTHER DISCOUNTS
3.1- Loss offsetting
3.1.1- Previous losses
3.1.2- Losses of acquired company
3.1.3- Overseas losses
3.2- Donations and subsidies
3.3- Sponsorship costs
3.4- Dividends

Source: Corporate Tax Law numbered 5520 – Income Tax Law numbered 193

Activate Your Techno Park, R&D, Design Center Expenses!

MuhasebeNews — Tue, 02 May 2017 07:30:15 +0000

The importance of creditworthiness and R&D finance with regard to Techno park Companies!
I would like to quote from the meeting done between me and CEO of a company being active in Techno Park about our researches.

In the company, R&D expenses had been recorded in income statement for the financial year thus far. As a result of that, either the commercial profit of the company was too little or there was trading loss in financial statements. In the face of such a situation, the company making loss continuously couldn’t find any bank credit for its financial needs which meant its creditworthiness was destroyed.

As we have already said, it is also so crucial to see the creativity and creditworthiness of the source of finance.

If you have R&D Project (whether it is Techno park, R&D or design center or not), you should activate your expenses in order to obtain both tax advantage and financial advantage.

Source: Güneri GÖZÜAÇIK – CPA – Modern CPA – İstanbul

In Which Law Does the Regulation Related to R&D Discount Take Part in Turkey?

MuhasebeNews — Fri, 21 Apr 2017 15:21:05 +0000

The sub clause (a) of the first clause of article 10 of the Corporate Tax Law Numbered 5520 related to the R&D discount has been abolished as of the date of 09.08.2016 in compliance with article 57 of the law numbered 6758.

The law on the amendment of some laws on the purpose of improvement of the investment environment numbered 6728 and article 3/A have been added to the law on the support of research, development and design activities numbered 5746. R&D discount institution related to the R&D and innovation activities existing within the structure of income and corporate taxpayers’ corporations has been specified in article 3/A of the law numbered 5746.

Accordingly, 100% of research and development expenses related to searching new technology and information developed within the structure of income and corporate taxpayers’ corporations will be a subject for discount on the determination of profit in line with article 10 of the Corporate Tax Law numbered 5520 and article 89 of the law numbered 193; providing that these projects are regarded as R&D and innovation projects by the Ministry of Science, Industry and Technology.

Herewith, R&D discount will be applied to the applications done within the scope of article 3/A of the law numbered 5746 as of the date of 09.08.2016 as long as the law numbered 5746 and the related legislations are taken into consideration about the discounts related to research and development projects on searching new technology and information. On the other hand, R&D discount will be applied to the projects being subject to the applications done before 09.08.2016 within the scope of General Communiqué on Corporate Tax with serial number 1 according to the provisions (the provisions before the sub clause (a) of the first clause of article 10 of the Corporate Tax Law was amended with the Law numbered 6728).

Source: Corporate Tax Law

Fifth Turkey-Azerbaijan-Georgia Triad Business Forum Held in Istanbul

MuhasebeNews — Wed, 22 Mar 2017 14:50:26 +0000

Hosted by DEİK, fifth Turkey-Azerbaijan-Georgia Business Forum was held in Istanbul on February 17 with the participation of Minister of Science, Industry and Technology of Turkey Dr. Faruk Özlü, Minister of Economy of Azerbaijan Şahin Mustafayev, Minister of Economy and Sustainable Development of Georgia Giorgi Gakharia, Deputy Minister of Economy of Turkey Fatih Metin, DEİK Board Member Rona Yırcalı.

Minister of Science, Industry and Technology of Turkey Dr. Faruk Özlü said new agreements between Turkish, Azeri and Georgian businessmen will establish strong partnerships between the countries. Turkish republic is ready to take every step to build stronger economic and commercial relations with Azerbaijan and Georgia since they hold a significant geostrategic position in South Caucasia.
Turkey is growing despite global adversity but also its macroeconomic indicators are in a positive trend. Turkish economy has been affected slightly from the neighboring countries and the world, nevertheless, Turkey is determined to do business with local currency. Relations with Azerbaijan and Georgia advance faster in comparison to those with other countries yet trade volume growth needs to be accelerated. Turkish construction companies bring investment along with their services; as a result, Turkish construction business should not be undermined. Trans Anatolian Natural Gas Pipeline Project (TANAP) is being conducted with Azerbaijan and Baku-Tbilisi-Kars railway will be completed in 2017. Efforts for the revival of mid corridor of Silk Trade Route still continue and businessmen play a key role to enhance relations.

Minister of Economy of Azerbaijan Şahin Mustafayev stated that Azerbaijan, Georgia are united with Europe thru Turkey. He highlighted Azerbaijan’s investment in Turkey since its worth is 9 billion USD. Turkey is Azerbaijan’s number 1 trade partner, furthermore, investment in Turkey will continue to increase. 330 Turkish companies operate in Azerbaijan and trade agreements between 3 countries increase trade volume tremendously.

Minister of Economy and Sustainable Development of Georgia Giorgi Gakhariaexpressed the existing collaboration between three countries should continue. Turkey and Azerbaijan are Georgia’s key trade partners and new regulations are enacted to facilitate investment and business operations in Georgia. Georgia ranks 23 in World Bank’s List of Ease of Doing Business and it holds Free Trade Agreements with Commonwealth of Independent States, European Union and Turkey thus have access to one third of global market.

Deputy Minister of Economy of Turkey Fatih Metin underlined the significance of this meeting that united business communities from three partner countries. Georgia, Azerbaijan and Turkey should remove every trade barrier in order to elevate trade volume to 20 billion USD. Three countries will meet the target in near future by uniting Turkey’s R&D and innovation infrastructure with Georgia’s rich natural resources and Azerbaijan’s strong energy infrastructure to develop joint projects.

DEİK Board Member Rona Yırcalı expressed that Turkey, Azerbaijan and Georgia are trying hard to build sustainability in the region. Economic and commercial relations between three countries lay a foundation for the triad partnership. In the previous Business Forum trade volume target has been set to 20 Billion USD yet current volume is 14 billion USD. As representatives from the business communities of three countries, our responsibility is to reach the target and make the trade volume grow. Key topics of the Business Forum will be regional business opportunities, mainly focusing on project finance models and how we can cooperate in the fields of transportation and logistics.

Turkey-Azerbaijan Trade Figures (Ministry of Economy- 2016)
Turkish Export to Azerbaijan: 1.278 Billion USD
Main Export items:Guns and ammunition, furniture, towel, iron and steel, construction materials
Turkish Import from Azerbaijan:278 Million USD
Main Import Items:Ethylene polymers, processed aluminum, electric energy, acyclic alcohols, petroleum oils
Trade Volume:1.568 Billion USD
Trade Balance: 1.008 Billion USD

Turkey-Georgia Trade Figures (Ministry of Economy- 2016)
Turkish Export to Georgia:1.177 Billion USD
Main Export Items:Plastic hoses, pipes and fittings, iron and steel, hygienic towels
Turkish Import to Georgia: 212 Million USD
Main Import Items: Meat, offal, marine animals, textile, iron, fish and marine mammals.
Trade Volume: 1.389 billion USD
Trade Balance: 965 million USD

How Much Money Does Turkey Spend on R&D?

MuhasebeNews — Mon, 20 Mar 2017 14:58:40 +0000

HOW MUCH MONEY DOES TURKEY SPEND ON R&D?
-According to statistical data, Turkey spent 20 billion 615 million TL on R&D in 2015. Furthermore, Turkey spent approximately 124 billion TL on R&D last 15 years.
– In the same period, annual expenditure on R&D was about to 8 billion 269 million.
– The amounts of expenditures on R&D between 2001 and 2015 are stated below year by year:

Source: Turkish Statistical Institute

Date: 20 March 2017