Companies operating in technology development zones and corporate taxpayers benefiting from R&D and design deductions are subject to a statutory obligation to allocate a portion of their tax incentives to venture capital investments. Investment obligations arising from exemptions or deductions claimed for the 2025 fiscal year must be fulfilled by 31 December 2026.
1. Legal Framework of the Venture Capital Investment Obligation
The venture capital investment obligation is governed by Additional Article 3 of Law No. 4691 on Technology Development Zones and Article 3(14) of Law No. 5746 on Supporting Research, Development and Design Activities.
Under these provisions, taxpayers benefiting from qualifying income exemptions or R&D and design deductions exceeding the prescribed threshold are required to transfer a specified percentage of the relevant amount to a temporary account under equity on their balance sheets and allocate that amount to investments permitted under the applicable legislation.
Presidential Decision No. 10803, dated 31 December 2025, revised the monetary thresholds applicable to this obligation. The Decision entered into force on 1 January 2026.
2. Which Companies Are Subject to the 3% Investment Obligation?
Under the rules applicable in 2026, the obligation applies to:
- Taxpayers within the scope of Law No. 4691 on Technology Development Zones: Income and corporate taxpayers, including software and technology companies operating in technoparks, that benefit from the statutory exemption on income derived from qualifying activities carried out in technology development zones, where the amount of exempt income claimed through their annual tax returns is TRY 5,000,000 or more.
- Corporate taxpayers within the scope of Law No. 5746 on Supporting Research, Development and Design Activities: Corporate taxpayers benefiting from R&D and design deductions in connection with R&D and design centres or other qualifying R&D, innovation and design activities supported under the legislation, where the amount of deductions claimed through their annual tax returns is TRY 5,000,000 or more.
Such taxpayers are required to transfer 3% of the relevant exemption or deduction amount to a temporary account under equity on their balance sheets.
The amount required to be allocated is subject to an annual cap of TRY 100,000,000.
Accordingly, the obligation does not arise solely because a company operates within a technology development zone or holds R&D centre status. Rather, it depends on whether the amount of the qualifying exemption or deduction claimed through the relevant annual tax return reaches the prescribed threshold.
3. How Is the Investment Amount Calculated?
For example, a company benefiting from a technology development zone income exemption of TRY 20,000,000 for the 2025 fiscal year would calculate its investment obligation as follows:
TRY 20,000,000 × 3% = TRY 600,000
The company must transfer TRY 600,000 to a temporary account under equity and allocate that amount to one of the investment instruments prescribed by law.
Importantly, the 3% rate is not calculated on the company’s total turnover or accounting profit. It applies to the amount of the relevant exemption or deduction claimed through the annual tax return under the applicable legislation.
4. What Investment Methods Are Available?
Laws No. 4691 and No. 5746 provide three alternative methods for fulfilling the investment obligation:
- Purchasing participation units in venture capital investment funds (VCIFs) established to invest in entrepreneurs resident in Türkiye;
- Making capital contributions to venture capital investment companies (VCICs);
- Making capital contributions to entrepreneurs operating in incubation centres within the scope of Law No. 4691.
However, the Capital Markets Board of Türkiye (CMB), through its decision dated 26 October 2026, increased the financial thresholds applicable to qualified investor status and removed the previous exemption applicable to VCIF investments. These changes have made it more difficult for small and medium-sized companies, in particular, to acquire VCIF participation units.
Under the new rules, the financial assets threshold for obtaining professional client status upon request has been increased to TRY 50,000,000. Nevertheless, whether a legal entity qualifies as a qualified investor must be assessed separately, taking into account the alternative eligibility criteria and exemptions provided under the applicable capital markets legislation.
These changes do not eliminate the statutory 3% investment obligation. However, they make the selection of an eligible investment method increasingly important.
Companies that do not satisfy the requirements for investing in VCIFs should therefore consider alternative methods, including capital contributions to VCICs or direct capital investments in entrepreneurs operating in qualifying incubation centres.
As each alternative is subject to its own legal requirements and implementation procedures, it is essential to ensure that the relevant investment is properly structured and completed within the statutory deadline.
5. Investment Deadline: 31 December 2026
Under the relevant statutory provisions, amounts transferred to the temporary account under equity must be allocated to one of the prescribed investment methods by the end of the year in which the account is established.
Accordingly, investment obligations arising from annual tax returns filed in 2026 in respect of the 2025 fiscal year must be fulfilled no later than 31 December 2026.
Merely adopting a decision to invest or commencing investment negotiations should not be regarded as sufficient compliance. The relevant investment transaction should be completed in accordance with the applicable statutory requirements and within the prescribed period.
6. Consequences of Failure to Fulfil the Investment Obligation
Under Additional Article 3 of Law No. 4691 and Article 3(14) of Law No. 5746, where the prescribed amount is not allocated to an eligible investment by the end of the relevant year, 20% of the exemption or deduction amount claimed through the annual tax return will cease to qualify for the relevant tax benefit.
Consequently, taxes that were not collected when originally due will be assessed without the imposition of a tax loss penalty, as expressly provided under the relevant statutory provisions.
For example, where a company has benefited from an income exemption of TRY 20,000,000 but fails to fulfil its investment obligation of TRY 600,000, an amount of TRY 4,000,000 will become ineligible for the exemption.
This amount does not represent the tax payable. The actual tax consequences will depend on the taxpayer’s circumstances and the applicable tax rate.
7. Steps Companies Should Take Before the End of 2026
With the 31 December 2026 deadline approaching, companies falling within the scope of the obligation should review their tax returns for the 2025 fiscal year and the amounts of exemptions or deductions claimed, accurately calculate their investment obligations, and assess the legal eligibility of their proposed investment methods.
In particular, following the CMB’s regulatory changes dated 26 October 2026, companies should reassess whether they satisfy the qualified investor requirements applicable to VCIF investments. Where these requirements cannot be met, the legal procedures necessary to implement alternative investment methods should be initiated without delay.
In conclusion, the 3% venture capital investment obligation is not merely an accounting requirement to allocate funds to a designated equity account. It is a statutory obligation requiring qualifying investments to be made through prescribed methods within a specific period, with potentially significant tax consequences in the event of non-compliance. Companies should therefore assess their available investment options and the applicable legal procedures well in advance of the year-end deadline.
Best Regards,
DT Law