Indirect R&D Incentives Reached 59.33 Billion TL in 2023
In 2022, the total tax incentives for R&D activities amounted to 26 billion 169 million TL, showing an increase of 126.7% to reach 59 billion 332 million TL in 2023. According to a statement from the Turkish Statistical Institute (TÜİK), enterprises benefiting from indirect R&D incentives received the most support from corporate tax, totaling 34 billion 810 million TL. This tax support was followed by income tax withholding incentive at 23 billion 661 million TL, income tax support at 815 million TL, and value-added tax (VAT) support at 46 million TL.
According to the declared R&D expenditures, it was observed that 60.1% of the provided indirect R&D incentives came from corporate tax, income tax, and VAT, while 39.9% came from income tax withholding support.
The share of indirect R&D incentives within private sector R&D expenditures was 24.1%. The share of indirect R&D incentives in the R&D expenditures of financial and non-financial companies rose from 13.3% in 2009 to 24.1% in 2023. The R&D expenditures of financial and non-financial companies were 3.2 billion TL in 2009 and reached 246 billion TL in 2023.
The number of enterprises benefiting from tax incentives for R&D activities reached 9,030 in 2023. When examining the enterprises that submitted declarations to benefit from the incentives by main activities, the top three sectors were information and communication with 4,575, manufacturing industry with 2,148, and professional, scientific, and technical activities with 1,291.
In terms of declared spending and received incentive amounts, the manufacturing industry ranked first. The total R&D expenditure declared by enterprises to benefit from support was calculated at 146 billion 558 million TL. In terms of declared expenditure amounts, the manufacturing industry had the largest share at 49.5%, followed by information and communication at 37.9%, and wholesale and retail trade; repair of motor vehicles and motorcycles at 4.2%.
Among enterprises primarily operating in the manufacturing sector, it was observed that of the 72 billion 516 million TL reported, 33.1% was declared by firms engaged in the manufacturing of motor vehicles, trailers, and semi-trailers; 26.2% by those involved in the manufacturing of computers, electronic, and optical products; and 14.2% by those in the manufacturing of electrical equipment.
When analyzing indirect R&D incentives by the main areas of activity of enterprises, it was noted that 43.2% of the total amount of 59 billion 332 million TL belonged to enterprises in the manufacturing industry, 42.6% to information and communication, and 5.0% to professional, scientific, and technical activities.
Regarding the distribution of declared R&D expenditures in the manufacturing industry by areas of activity in 2023, it was found that small and medium-sized enterprises (SMEs) benefited from 36.1% of the indirect R&D incentives.
When considering the size categories, it was apparent that 88.0% of the 9,030 enterprises benefiting from indirect R&D incentives were SMEs. The share of large enterprises benefiting from R&D incentives was 12.0%, while they accounted for 63.9% of the indirect R&D incentives.
The utilization rate of indirect R&D incentives by SMEs was 36.1%. When examined by size categories, it was observed that 51.0% of the 21 billion 409 million TL of indirect R&D incentives provided to SMEs was granted to medium-sized enterprises, 37.2% to small enterprises, and 11.7% to micro-sized enterprises.