New developments
Presidential Decree No. 6652, published in the Official Gazette dated 10 January 2023, re-regulated the additional corporate income tax deduction for R&D and design centers while Presidential Decree No. 6657 set as zero the resource utilization support fund (RUSF) rate for loans obtained from abroad by financial leasing companies.
What do the decrees mean?
- The corporate income tax deduction for R&D and design centers used to be regulated by the Council of Ministers’ Decree No. 2016/9092 dated 1 January 2016. This decree was ambiguous since the terms ‘design centers’ and ‘design activities’ were not included in the indicators to be fulfilled for the additional corporate income tax deduction. In addition, this decree provided that the additional corporate income tax deduction is in effect until 31 December 2023.
Presidential Decree No. 6652 nullified the Council of Ministers’ Decree No. 2016/9092. New regulation explicitly included ‘design centers’ and ‘design activities’ within the indicators to be fulfilled for the additional corporate income tax deduction and clarified the ambiguity. In addition, the effective date of the corporate income tax deduction is extended until 31 December 2028.
- Presidential Decree No. 6657 set as zero the RUSF rate for loans obtained from abroad by financial leasing companies. The RUSF rates applicable for loans obtained from abroad by financial leasing companies were as follows:
| Over interest of the loans obtained from abroad in TRY | |
| For those with an average maturity of less than 1 year | 1% |
| For those with an average maturity of 1 year and over | 0% |
| Over principal of the loans obtained from abroad in foreign currencies and gold | |
| For those with an average maturity of less than 1 year | 3% |
| For those with an average maturity between 1 year (including 1 year) and 2 years | 1% |
| For those with an average maturity between 2 years (including 2 years) and 3 years | 0.5% |
| For those with an average maturity of over 3 years (including 3 years) | 0% |
- Both decrees came into effect by their publish date, 10 January 2023.
Conclusion
Presidential Decree No. 6652 not only clarified the ambiguity regarding the application of the corporate income tax deduction for R&D and design centers but also extended the effective period of the additional corporate income tax deduction from 31 December 2023 to 31 December 2028.
With Decree No. 6657, in addition to banks and financial institutions, the RUSF rate for loans obtained from abroad by financial leasing companies was set as zero.
