Presidential Decree No. 4625, published in the Official Gazette dated 17 October 2021, increased the period for employees to spend up to 50% of the total working hours out of R&D or design centers and technology development zones until 31 December 2022, within the scope of the withholding tax incentive applied for these centers and zones.
What does Presidential Decree No. 4625 mean?
Under Temporary Article 2 of Law No. 4691 on Technology Development Zones and Article 3 of Law No. 5746 on Promoting Research, Development and Design Activities, the working periods that employees spend out of technology development zones and R&D or design centers are deemed within the scope of the withholding tax incentive, provided that the period spent out of these zones and centers does not exceed 20% of the total working period pertaining to the application of the incentive and the period outside of zones and centers is directly related to the projects carried out in these zones and centers. The president can increase the percentage to up to 50%.
Presidential Decree No. 4625 increased the percentage from 20% to 50% to be effective until 31 December 2022. The decree came into effect on 17 October 2021.
Conclusion
Within the scope of the withholding tax incentive applied to technology development zones and R&D or design centers, the percentage of the working periods that can be spent out of technology development zones and R&D or design centers has been increased from 10% to 50% until 31 December 2022.