How does the stamp tax exemption work?

Applying for the stamp tax exemption can be a thorny issue in Turkey. For those companies who operate an R&D department and can benefit from the exemption, the process is daunting and has resulted in many companies who qualify avoiding the application process. In this article, we will try to explain how the process should work and under what conditions a company can benefit from this exemption.

In 2016, some amendments were made to the Regulation for Implementation and Supervision of Support for Research, Development and Design Activities. In short, support and incentive mechanisms were improved, including the adoption of the stamp tax exemption which waived taxes on documents drafted in relation to any R&D, innovation and design activities.

Who qual f es?

Companies engaged in R&D, innovation or design activities and project based activities are subject to exemption based on documents issued by a government authority. Those who qualify and the government authority granting approval are as follows:

For companies who wish to benefit from the exemption, it would be enough to submit their certified documents obtained or approved by the above public institutions or organizations to the institutions and organizations acting as notaries, public offices, other public institutions and organizations during the transaction.

However, in the circumstance that the support given to the expense/purchase on the docu-

ment (for example, procurement of services for domestic procurement etc.) is not explained clearly, it would be appropriate to demand and obtain a letter or decision clearly expressing that the concerning expense is within the scope of the project and supported by the relevant public institution or organization and submit it to the institutions and organizations handling the transactions.

Another source of confusion is where the certifying documents should be submitted. Based on the legislation, documents should be submitted to the notary if they are an agreement between two different legal entities; if one of the parties is public, they should be submitted to the relevant public institution and organization.

Of course some responsibilities have been assigned to the institutions and organizations handling the transactions. Notaries, government authorities and other public institutions and organizations that apply stamp tax exemptions are required to fill in the Notification Form for Taxpayers Benefitting from Stamp Tax Exemption within one month following the date on which the transaction concerning the exemption took place and submit that form to the tax office.