Türkiye’s indirect R&D tax incentives soar to 59.3 billion TRY in 2023

Enterprises benefited significantly from these incentives, with corporate tax reductions leading the way at 34.8 billion TRY. Other notable contributions included 23.7 billion TRY from income tax withholding incentives, 815 million TRY from income tax support, and 46 million TRY from VAT support. These forms of assistance were distributed such that 60.1% came from corporate tax, income tax, and VAT, while the remaining 39.9% stemmed from income tax withholding incentives.

The manufacturing sector emerged as the primary beneficiary, accounting for 49.5% of the 146.6 billion TRY in declared R&D expenditures. Within manufacturing, key areas such as the production of motor vehicles, trailers, and transport equipment received the largest share at 33.1%. This was followed by the manufacture of computer, electronic, and optical products at 26.2%, and electrical equipment at 14.2%. The information and communication sector also played a major role, contributing 37.9% of declared R&D expenditures, while wholesale, retail trade, and repair activities accounted for 4.2%.

Private sector engagement in R&D saw significant growth, with indirect tax incentives representing 24.1% of total R&D expenditures in 2023, compared to 13.3% in 2009. Financial and non-financial corporations reported a dramatic increase in R&D spending, rising from 3.2 billion TRY in 2009 to 246 billion TRY in 2023.

A total of 9,030 enterprises benefitted from indirect R&D tax incentives in 2023. Among them, the information and communication sector led with 4,575 enterprises, followed by manufacturing with 2,148, and professional, scientific, and technical activities with 1,291. While SMEs made up 88% of the beneficiaries, large-scale enterprises accounted for 63.9% of the total incentives. SMEs received 21.4 billion TRY in support, with medium-sized enterprises taking the largest portion (51.0%), followed by small-sized enterprises (37.2%) and micro-sized enterprises (11.7%).

These developments underscore the critical role of indirect R&D tax incentives in advancing innovation within Türkiye’s economy. With sectors like manufacturing and technology leading the way, these measures are set to continue driving technological progress and economic growth in the years to come. (ILKHA)