SATURDAY, March 12, 2011 Official Gazette No. 27872
LAW
LAW AMENDING THE TECHNOLOGY DEVELOPMENT ZONES LAW
LAW AMENDING THE TECHNOLOGY DEVELOPMENT ZONES LAW
Law No. 6170 Date of Adoption: March 2, 2011
ARTICLE 1 — Paragraphs (c), (g), (j), and (l) of the Law on Technology Development Zones No. 4691 dated June 26, 2001, are amended as follows, and the following subparagraphs are added to the article:
“c) Research and Development (R&D): Research and development refers to creative work conducted on a systematic basis to expand the body of knowledge comprising culture, human knowledge, and societal knowledge, and to utilize this knowledge to design new processes, systems, and applications, including software,”
“g) Innovation: Processes and the results of such processes created through an idea for a new product, good, service, application, method, or business model that can successfully address social and economic needs and be successfully introduced into existing markets or create new markets,”
“j) Founding Board: A body consisting of representatives from at least one university or high-tech institute located within the Region or in the province where it is situated, as well as representatives from public R&D-GE center or institute, and representatives of other organizations; this committee is responsible for all matters and procedures related to the establishment of the Region before the relevant institutions and organizations until the Region’s management company is established,”
“l) Software: A set of commands or programs that enables a computer, communication device, or other information technology-based device to operate and perform the necessary operations on the data provided to it, along with documents including the code lists, operating and user manuals, all of which are systematically as well as all forms of delivery for these products, goods, and services, such as licensing, leasing, and the transfer of all rights,”
“m) R&D Personnel: Researchers, software developers, and technicians directly involved in R&D activities,
n) Researcher: Specialists holding at least a bachelor’s degree who participate in the design or creation of new knowledge, products, processes, methods, and systems, as well as in the management of related projects, within R&D activities and projects falling under the definition of innovation,
o) Technician: Individuals with technical knowledge and experience who have completed higher education in engineering, natural sciences, or health sciences, or who have graduated from technical, natural science, or health departments of vocational high schools or vocational colleges,
p) Support Staff: Managers, technical staff, laboratory technicians, secretaries, workers, and similar personnel who participate in R&D activities or are directly related to such activities,
r) Software Personnel: Qualified personnel who work in the process defined as software development, creating and producing programs, and who possess sufficient experience or education in their field,
s) Incubator: Structures designed specifically to foster the development of young and new businesses, where office services, equipment support, management support, access to financial resources, and critical business and technical support services are provided under one roof by a single entity,
t) Technology Transfer Office (TTO): An organization that facilitates information sharing, coordination, and research direction between technology-developing R&D institutions and organizations and technology-using industrial companies or other technology or R&D institutions and organizations; developing collaboration, protecting, marketing, and selling intellectual property rights, and managing revenues generated from the sale of intellectual property,
u) Technological Product: A product created by qualified personnel using scientific knowledge and technological research to meet societal needs and raise the standard of living, which is distinctly different from existing products and possesses high added value and competitiveness,”
ARTICLE 2 − Article 4 of Law No. 4691 has been amended as follows.
“ARTICLE 4 − Applications regarding the Region shall be submitted by the Founding Board. To evaluate the applications, a committee shall be established under the chairmanship of the General Director of Industrial Research and Development at the Ministry, comprising representatives from the Ministry of Finance, the Ministry of Public Works and Settlement, the Undersecretariat of the State Planning Organization, the Presidency of the Council of Higher Education, the Presidency of the Scientific and Technological Research Council of Turkey, the Union of Chambers and Commodity Exchanges of Turkey, and one representative each from a private organization active in the field of technology to be designated by the Ministry.
The Council of Ministers, upon the favorable opinion of the Evaluation Committee and the Ministry’s proposal, decides on the inclusion of additional areas into the Zone or on changes to the Zone’s boundaries. These decisions enter into force upon publication in the Official Gazette.
During the planning process in the Zones, zoning plans and amendments, as well as parceling plans and amendments, are prepared by the Zone’s managing company in accordance with the forthcoming regulation and enter into force upon approval by the Ministry.
Finalized zoning plans are sent to the relevant institutions for information purposes. Expenses related to land and building acquisition, planning and design, and the construction of infrastructure and superstructure are borne by the management company.
Implementation projects prepared or commissioned in accordance with the provisions of the Urban Planning Law No. 3194 dated May 3, 1985—for which technical responsibility rests with the project designer and the technical supervisor designated by the managing company—are approved by the Ministry.
In accordance with the implementation zoning plan approved by the Ministry and entered into force, permits and authorizations related to land use, the design, and construction of buildings and facilities are issued by the Ministry in accordance with the provisions of Law No. 3194.
Land required in the regions may be acquired in accordance with the provisions of the Expropriation Law No. 2942 dated November 4, 1983.
University lands located within the region’s boundaries may be allocated to the region’s managing company, provided that the respective universities deem it appropriate and grant permission, with ownership remaining with the relevant university. This provision also applies to lands belonging to other public institutions and organizations. If a request is made to establish an easement or grant a usage permit on real property within the Region that is under the special ownership of the Treasury or under the control and administration of the State, the Ministry of Finance shall establish an easement or grant a usage permit in favor of the management company, free of charge for the first five years, and for subsequent years, in exchange for two per thousand of the property tax value of the real property in question. No revenue share shall be collected from activities conducted on these properties for which an easement right has been established or a usage permit granted. The Ministry of Finance is authorized to determine the procedures and principles regarding the implementation of this paragraph and to differentiate the fee for the easement right or usage permit by province according to the socio--economic development ranking determined by the Undersecretariat of the State Planning Organization, or to reduce it to zero. The establishment of a Zone requires the presence of a university, a high-technology institute, or a public R&D center or institute within the area designated for the Zone or within the boundaries of the province where the Zone is located, as well as sufficient R&D and industrial potential in the region and financial adequacy. The criteria for R&D and industrial potential, as well as financial adequacy, are specified in the relevant regulation.
Land designated as a Zone may not be used for any other purpose under any circumstances.”
ARTICLE 3 − Article 5 of Law No. 4691 has been amended as follows.
ARTICLE 5 − Among the founders of the management company responsible for the management and operation of the Zone, there must be at least one university or high-technology institute, or a public R&D center or institute, located within the Zone or in the province where it is situated.
In addition, the following may become founding members or subsequent partners of the management company: chambers and stock exchanges affiliated with the Union of Chambers and Commodity Exchanges of Turkey; chambers, unions, and federations affiliated with the Confederation of Turkish Tradesmen and Craftsmen; local governments; banks and financial institutions; domestic and foreign private-law legal entities, foundations, cooperatives, and associations related to R&D and technology development, relevant public institutions, and exporters’ associations may become founding members or join as partners at a later date.
Local governments may become partners in the managing company based on their own council decision, without the need for any further procedure.
Foreign private-law legal entities may become partners in the managing company in accordance with the provisions of the Direct Foreign Investment Law No. 4875 dated June 5, 2003, and related legislation.
The qualifications required for individuals to be appointed by the Board of Directors to the senior management of the managing company’s general directorate shall be determined by regulation.
The management company is responsible for: carrying out planning and project design for the Zone; providing the necessary infrastructure and superstructure services, as well as all other services required for the Zone; establishing incubator centers and technology transfer offices; managing the Region in accordance with the purpose set forth in this Law and the relevant regulations, preventing entrepreneurs and third parties from acting in violation of these provisions, and taking the necessary measures.
A public interest decision is issued by the Ministry upon application by the management company. If the managing company operates in the Region for purposes other than those specified in this Law, the Ministry shall issue a warning and grant a specific period of time, requiring the company to conduct activities in accordance with its purpose. If, at the end of this period, it is determined that the managing company has not operated in accordance with its purpose, the Ministry shall apply to the competent court to request the termination of the terms of office of the members of the managing company’s board of directors,
to terminate the terms of office of the members of the board of directors, to appoint a receiver to manage the company, and to liquidate the management company. If the court decides to liquidate the management company, subject to the rights, obligations, and liabilities of the company and its managers remaining intact, the Ministry shall expropriate the land belonging to the Region that is owned by the management company, along with the real property located thereon, and may transfer the management of the Region to another management company.
The procedures for establishing the management company and submitting the Region’s zoning plans to the Ministry for approval must be completed within one year from the date of publication of the Region’s establishment decision in the Official Gazette. If these procedures are not completed within this period, the Founding Board shall apply to the Ministry for an extension of time. If the Ministry deems it appropriate, it may grant a one-time extension of up to six months. If the necessary arrangements are not made within this additional period, the Council of Ministers’ decision regarding the declaration of the Region, along with its provisions and consequences, shall be null and void. Among the partners of the managing company—universities, high-technology institutes, or public R&D centers or institutes—may pay the capital share they have committed to the managing company from their working capital revenues.
The management company is required to submit information regarding its own activities and those of entrepreneurs located in the Zone to the Ministry on a quarterly basis, in accordance with the procedures and principles specified in the regulation.
The managing company shall have all its accounts and transactions audited annually by a certified public accountant authorized under the Law No. 3568 on Certified Public Accountants and Certified Public Accounting Firms, dated June 1, 1989. The certified public accountant shall send a copy of the audit report it prepares to both the management company and the Ministry within the same timeframe.
At the end of each year, the managing company shall conduct an impact assessment of the support and exemptions provided to itself and to businesses engaged in R&D activities in the Region, and shall submit a copy of the report prepared on this matter to the Ministry.”
ARTICLE 4 − The first paragraph of Article 7 of Law No. 4691 has been amended as follows, and the phrase “and administrative” has been added after the word “researcher” in the first sentence of the second paragraph.
“Personnel are employed in the management company and in the activities carried out in the Zone in accordance with the applicable labor and employment legislation. In the Zones, foreign executives and qualified R&D personnel may be employed within the framework of Law No. 4875, the Law on Work Permits for Foreigners No. 4817 dated February 27, 2003, and the provisions of relevant legislation.”
ARTICLE 5 − Article 8 of Law No. 4691 has been amended as follows.
“ARTICLE 8 − Expenses related to the construction of the infrastructure, administrative buildings, and incubator centers necessary for the establishment of the Zones, as well as-GE and innovation activities—the portion of the expenses that cannot be covered by the managing company may be covered by an appropriation allocated to the Ministry’s budget for this purpose, subject to the limit of such appropriation.
Businesses may make the investment necessary to produce the technological product obtained as a result of R&D projects they initiate and complete within the Zone, provided that the managing company deems it appropriate and the Ministry grants permission. Production permits for the technological products subject to such investments shall be issued primarily by the relevant institutions and organizations, following consultation with the Ministry. Activities related to these investments are recorded separately from the R&D activities conducted by the investing businesses in the Zone in the ledgers required to be maintained under the Tax Procedure Law No. 213 dated January 4, 1961. Personnel employed in the Zone as a result of these investments and the profits derived from such investments shall be taxed in accordance with the principles applicable to businesses operating outside the Zone and their personnel.
The managing company is exempt from stamp duty and fees arising from documents issued and transactions conducted in connection with the implementation of this Law. Municipalities shall not collect wastewater charges from Zones operating wastewater treatment facilities.
The procedures and principles regarding the implementation of this article shall be determined by a regulation to be prepared by the Ministry, following the approval of the Ministry of Finance.”
ARTICLE 6 − Article 10 of Law No. 4691 has been amended as follows.
“ARTICLE 10 − In activities conducted within the Regions covered by this Law, the provisions of the Public Financial Management and Control Law No. 5018 dated December 10, 2003, the Court of Accounts Law No. 6085 dated December 3, 2010, the State Procurement Law No. 2886 dated September 8, 1983, and the Public Procurement Law No. 4734 dated January 4, 2002, shall not apply.”
ARTICLE 7 — The first and second paragraphs of Transitional Article 2 of Law No. 4691 have been amended as follows.
“Income earned by management companies under the provisions of this Act, as well as income and corporate tax payers operating in the Region, shall be exempt from income and corporate taxes until December 31, 2023, with respect to profits derived exclusively from software and R&-GE activities within the Region are exempt from income and corporate taxes until December 31, 2023.
The salaries of R&D and support staff working in the Zone in connection with their duties are exempt from all taxes until December 31, 2023. The number of support staff eligible for this exemption may not exceed 10 percent of the number of R&D staff.
The managing company verifies whether individuals whose salaries benefit from the income tax exemption are actually working in the Zone. However, a portion of the salaries of R&D personnel working on R&D projects conducted by entrepreneurs located in the Zones, corresponding to the time they are required to spend outside the Zone with the managing company’s approval in connection with their duties in the Zone, is excluded from the scope of income tax
. The amount of salary to be excluded is determined by a regulation to be prepared with the approval of the Ministry of Finance. If it is determined that the time spent outside the Zone with the approval of the managing company is not related to the duties performed in the Zone, the relevant business shall be liable for the tax lost and any related penalties.”
ARTICLE 8 − The following transitional article has been added to Law No. 4691.
“TRANSITIONAL ARTICLE 3 − Zones established in accordance with the purpose of this Act prior to the effective date of this article shall bring their status into compliance with this Act within one year from the effective date of this article. The provisions of Article 5 of this Law shall apply to those that fail to bring their status into compliance with this Law within the specified period.”
ARTICLE 9 − This Act shall enter into force on the date of its publication.
ARTICLE 10 − The Council of Ministers shall enforce the provisions of this Act.
March 11, 2011