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New R&D reform package to boost innovation 

The Turkish government has passed an extensive support package for research, development (R&D) and innovation-related activities in an effort to become an innovation-driven, high-tech economy, effective March 1.

The R&D Reform Package was first unveiled by Prime Minister Ahmet Davutoğlu on January 14 with the aim to increase the competitiveness of vital industries, strengthen university-industry cooperation and increase R&D spending.

Among the key elements of the package are:

- The establishment of design centers that will benefit from the same level of incentives as R&D centers. Design-related activities conducted in technology development zones (TDZs) are also to be supported,

- Tax deductions for companies engaged in R&D and design, including SMEs that contract such services to outside parties,

- A reduced staff requirement to establish an R&D center to 15 persons from 30,

- The state will underwrite a portion – equaling the gross total of the minimum wage in Turkey – of researchers’ wages for a duration of two years, provided they are employed by an R&D center and are graduates of basic sciences,

- Tax deduction and grants for pre-competition cooperation projects in order to encourage joint projects,

- Customs duty exemptions for materials obtained from abroad within the scope of R&D, innovation and design projects,

- The establishment of specialized TDZs for priority and strategic sectors (ICT, healthcare, biotech, nanotech, defense and aerospace, etc.) in order to form focused R&D organizations,

- Researchers employed in TDZs, R&D centers and design centers will benefit from exemptions during site studies and postgraduate educational activities abroad,

- Tax deductions for companies who provide venture capital for start-ups established using the Techno-Initiative Capital Support Program in TDZs,

- Increasing the sum of techno-initiative capital support to TRY 500,000 from TRY 100,000, depending on the project while extending the application period to 10 years from the date of the founder’s graduation,

- Creating a system of standardization and authorization for software projects,


- Exemption from income tax cuts for faculty members who take part in university-industry cooperation projects. The income tax cut from the university’s floating capital is limited to 15 percent with the remaining 85 percent payable to the faculty member.

R&D spending in Turkey surpassed 1 percent of the country’s total GDP in 2014, with private-sector outlay accounting for almost half, at 49.8 percent.

Among Turkey’s 2023 targets, a set of goals in a variety of fields to be reached by the centennial of the Republic, is increasing the R&D expenditure to account for 3 percent of the country’s GDP.

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