Taxation and Government Incentives for Game Companies in Turkey – A Comprehensive Guide

1. Corporate Tax, VAT, and Income Tax Obligations for Game Companies

Game companies operating in Turkey are subject to the same fundamental taxes as other businesses, with some sector-specific nuances. The primary tax on company profits is the Corporate Income Tax. As of 2025, the standard corporate tax rate in Turkey is 25% on annual taxable profits (with a higher 30% rate for financial sector companies). Game development studios, publishers, and other game companies must file an annual corporate tax return and pay this tax on their net profits. The return is submitted by the end of April each year for the previous calendar year. Companies also pay advance corporate tax quarterly (as “temporary tax”), which is later credited against the annual tax liability. Notably, Turkey provides a tax incentive for exporters: companies that derive income from exports (including software and digital services exports) benefit from a 5 percentage-point reduction in the corporate tax rate. This means an exporting game company’s profit may be taxed at an effective 20% instead of 25%. Furthermore, under Corporate Tax Law Article 10(ğ), 50% of income from certain services provided abroad (such as software, design, engineering services used abroad) was deductible, and this deduction rate was increased to 80% at the end of 2023. In practice, for eligible game companies, 80% of their profit from foreign game sales or services can be exempted from corporate tax, leaving only 20% taxable. Combined with the export rate reduction, this yields a very low effective tax rate – roughly 4-5% on qualifying income. These incentives greatly reduce the tax burden for game exporters (discussed further in Section 7). However, a new minimum corporate tax rule from 2025 ensures that even with exemptions, established companies pay at least 10% tax on profits (explained in Section 7).

In addition to profit taxes, game companies must comply with Value Added Tax (VAT) obligations. The standard VAT rate in Turkey is 18% for most goods and services, including sales of video games, in-game items, and digital content to Turkish consumers. If a game is sold or a digital service is provided to customers in Turkey, the company is required to charge 18% VAT on the sale and remit it to the tax authority. This applies whether the sale is of a physical game (rare nowadays) or a digital product. However, if the sale qualifies as an export of services, it can be zero-rated for VAT. According to VAT Law Article 11, services provided to a foreign client and utilized abroad are exempt from VAT. For example, revenue from a game downloaded and played by users outside Turkey can be treated as export of services (provided the service is rendered to a foreign resident and used outside Turkey), and thus no Turkish VAT is charged. In practice, major digital distribution platforms handle VAT in consumer transactions: App Store, Google Play, Steam, etc., typically include local VAT in the consumer price for Turkish users and handle VAT remittance themselves. The net payout to the developer is usually VAT-free from the developer’s perspective, especially when the transaction is considered between the platform (as the seller) and the end-user. For Turkish VAT reporting, the developer’s income from these platforms is often treated as an export (the platform entity is abroad), so the developer generally does not charge Turkish VAT on that income. On the other hand, if a game company sells directly to Turkish customers (say, via its own website or as a Turkish legal entity on a platform), it must register for VAT and charge 18% VAT on those domestic sales.

Personal Income Tax considerations arise mainly for individual developers or the employees of a game company. If the business is incorporated (Ltd. or JSC), the owners are not subject to personal income tax on the company’s trading profits; instead, profits are taxed at the corporate level. Should profits be distributed as dividends, there is a dividend withholding tax (generally 10% in Turkey) and further income tax for the shareholder depending on treaties and other conditions. If a game developer operates as a sole proprietorship (individual entrepreneur), their business income is subject to progressive income tax rates (up to ~40%). They must file a personal income tax return declaring their net profit. There are, however, special provisions: a “young entrepreneur” (under 29 starting their first business) can enjoy an income tax exemption on approximately TRY 75,000 of annual profit for the first three years of business (the exact exempt amount is adjusted annually; by 2025 it’s around TRY 150,000). This incentive has enabled many freelance or small-scale game developers to pay minimal tax in their initial years. Additionally, individuals under this scheme get their social security contributions (Bağ-Kur) paid by the government for one year.

For employees of game companies, the company must withhold income tax from wages (pay-as-you-earn) and remit it via monthly/quarterly payroll tax returns. The top marginal tax rate for employment income in Turkey is 40%. Employers also pay social security contributions for each employee (discussed in Section 5). However, game companies in certain zones (Techno-parks) or with R&D center status can benefit from withholding tax incentives: e.g. IT/R&D employees’ salaries can be partially or fully income tax-exempt under specific schemes (Section 5 explains these). In summary, a game company’s baseline obligations include paying corporate tax on profits, charging/remitting VAT on local sales, and withholding taxes for employee salaries, but Turkey’s targeted incentives can significantly alleviate these burdens (especially for export-oriented and R&D-heavy companies).

Quick Reference – Tax Obligations and Incentives for Game Companies:

Tax	Standard Rate & Obligations	Sector-Specific Incentives/Notes
Corporate Income Tax (Kurumlar Vergisi)	25% on net profits (2025). Annual return due by April. Advance quarterly payments offset annual tax. All Turkish-incorporated game companies are subject to CIT on worldwide income.	5-point rate reduction for exporters → effective 20% for export profits. 80% of overseas software/service income can be deducted from taxable profit (if brought into Turkey by filing date). Techno-park firms pay 0% CIT on qualified R&D/software income until end-2028.
Value Added Tax (KDV)	18% standard VAT on sales of goods/services in Turkey. Game sales, in-app purchases, subscriptions to Turkish users are subject to 18% VAT. The company must register and file periodic VAT returns.	Exports of services (e.g. game downloads or services used abroad) are zero-rated. Sales via foreign platforms: platforms usually handle local VAT for Turkish customers (developer’s share is often treated net of VAT as cross-border revenue). Some software delivered to local Turkish businesses can be VAT-exempt if developed in a Techno-park (per Techno-park VAT exemption).
Income Tax (Personal) (Gelir Vergisi)	Progressive rates (~15%–40%). Relevant for sole proprietors (who pay PIT on business profits) and for employees (withholding from salaries). Sole proprietors file annual returns; companies withhold tax from salaries and remit monthly/quarterly.	Young entrepreneur exemption: first TRY ~150k of annual profit tax-free for 3 years (for new <29yr-old business owners). Employees in Techno-parks or R&D centers: 80–100% of income tax on their wages is exempt (the company withholds but doesn’t remit). E-sports players/streamers: special 15% withholding regime up to ~TRY 3M revenue (since 2022).

2. Taxation of Mobile App Sales, Steam Revenues, In-App Purchases, Advertising, and Subscription Income

Game companies often generate revenue through multiple channels – mobile app stores, PC distribution platforms like Steam, in-app microtransactions, advertising within games, and subscription models. The taxation of these revenue streams depends on their nature and the flow of transactions.

Mobile App Sales (App Store/Google Play): When a Turkish game developer sells a mobile game or in-app content via Apple App Store or Google Play, the sale to the end-user is facilitated by the platform. Apple and Google, as the intermediaries (often the merchant of record), will charge the consumer in local currency, including Turkish VAT for Turkish users, and then remit VAT to Turkish authorities under their VAT registration (both Apple and Google have registered under Turkey’s VAT obligations for foreign providers). The developer typically receives their share of the revenue (after the platform’s commission, e.g. 30%) from Apple/Google. From the developer’s perspective, that payment is coming from an overseas entity (e.g. Apple Distribution International in Ireland) for the developer’s provision of software/content. Therefore, the income can be treated as an export of a service to a foreign company, meaning the developer does not charge VAT on that inter-company payment. In practice, the developer would issue an invoice or have a developer agreement statement for their earnings from Apple/Google without Turkish VAT. The key point is that VAT is handled by the platform for consumer sales, and the developer’s revenue is effectively VAT-free (zero-rated). Tax-wise, the developer must include this income in their corporate tax base, but it likely qualifies for the 80% corporate tax exemption for software exports, as well as the 5-point rate reduction for exporters. Turkish Tax Authority rulings (“özelge”) have generally considered app store revenues as software sale income, thus eligible for incentives if conditions are met. Even subscription fees collected via app stores are regarded as software service income. For example, multiple private rulings indicated that subscription sales via platforms like App Store/Google Play/Steam by Turkish developers are treated as software sales (which in Techno-parks are fully exempt, and outside Techno-parks can qualify for export incentives).

Steam and PC Game Revenues: Selling a PC or console game on digital distribution platforms (Steam, Epic Games Store, PlayStation Store, Xbox Live, etc.) follows similar principles. These platforms usually handle the consumer-facing side: charging the gamer (including applicable VAT for local buyers) and then remitting a share to the developer/publisher. For instance, Steam will collect money from users, including Turkish VAT for Turkish customers, then later pay the developer their portion. The developer’s contract is often with Valve/Steam’s foreign entity, so the payout to the developer is a cross-border payment. The developer should issue an invoice to Steam’s entity (often based in Luxembourg or elsewhere) for their share, treating it as an export of software/license rights – thus no Turkish VAT on that invoice. This is common practice: Turkish studios invoice Steam in USD/EUR without VAT. For corporate tax, such income is part of the company’s revenue and profit, but again likely qualifies for corporate tax incentives (as software export). Turkish tax officials have reportedly confirmed that store revenues for games developed in Techno-parks are considered software income fully exempt under Techno-park law, implicitly acknowledging that these platform sales are viewed as licensing of software. Outside of Techno-parks, developers rely on the general export incentive (80% exemption) which applies since the sale is to a foreign platform and used abroad. It should be noted that if a Turkish developer sells game codes/E-pins directly to Turkish customers (for example through a local platform), they would have to issue a VAT-inclusive invoice domestically. But the prevalent model for PC/console games is via global platforms, meaning Turkish VAT mainly arises at consumer level and is handled by the platform, not the developer.

In-App Purchases (Microtransactions): In-app purchases are common in free-to-play mobile and online games (buying virtual currency, items, etc.). The tax treatment again depends on the transaction chain. If the in-app purchase is processed by Apple/Google (on mobile) or by a platform (on console/PC), the situation is as above: the platform charges the user, including any VAT, and the developer receives net proceeds. The developer’s net proceeds from foreign platforms are treated as export income, no VAT charged by the developer. If the game developer processes in-app sales directly (e.g. a web-based game with its own payment gateway), then if the player is in Turkey, the developer must charge 18% VAT. If the player is abroad, that sale could qualify as a VAT-free export of services (assuming the service is enjoyed abroad and other formalities like invoicing a foreign customer are met). In summary, in-app purchase revenue from Turkish users is subject to Turkish VAT, whereas revenue from foreign users is generally not subject to Turkish VAT. All in-app revenues, however, contribute to the company’s gross income for corporate tax. There is consensus among tax advisors that in-app revenues, if stemming from foreign users and platforms, count as software service exports eligible for the 80% profit deduction and other incentives, but advertising-related revenues are distinguished (see below).

Advertising Revenues: Many game companies monetize via in-game ads, using networks like Google AdMob, Unity Ads, Facebook Audience Network, etc. In this model, a Turkish developer is providing advertising space in their game to an ad network, which typically is a foreign company (e.g. Google Ireland for AdMob). The developer receives periodic payments from the ad network for ad impressions/clicks. From a Turkish tax perspective, this is the developer providing advertising services to a foreign company, often for ads shown to users worldwide. According to Turkish VAT rules, if the service is rendered to a foreign entity and the benefit of the service is abroad, it can be VAT-exempt as an export. The trick is determining where the “benefit” of an advertising service occurs – Turkish authorities usually consider advertising “used” where the audience is. So if ads are shown to Turkish users, one could argue the service is enjoyed in Turkey. However, practically, since the contractual client is abroad (Google, etc.), and especially if ads also reach international users, companies often treat this as export of advertising service and do not charge VAT. Indeed, if an advertisement is aimed at foreign markets, Turkish tax authorities do not impose VAT or withholding on the payment to the foreign advertiser. A tax circular clarified that online ads for foreign-targeted products are not subject to the 15% withholding that applies to online ads targeting Turkish market.

That said, advertising revenues earned by a Turkish company are generally considered ordinary income, not software income. Tax experts note that in practice in-game ad revenues are not regarded as software export income for the 80% corporate tax deduction. They would still benefit from the 5-point CIT rate cut if they qualify as export revenue (which they likely do, as money comes from abroad), but the specific 80% exemption under CIT law 10(ğ) only lists certain service categories, and advertising isn’t explicitly one of them. Thus, a Turkish game studio’s AdMob earnings would be fully taxable (apart from general export incentives) rather than 80% exempt. Nonetheless, these revenues are still part of the export services sector, so they count toward being an “exporter” company (enabling the lower 20% CIT on that portion). One more angle: Turkish law introduced a 15% withholding tax on payments to non-resident online advertising providers a few years ago to tax Google/Facebook indirectly. Turkish businesses paying for ads to abroad must withhold 15%. However, a game company receiving ad revenue from Google does not itself pay this – rather, Google might be subject to Digital Services Tax on its ad revenue from Turkey, but the developer is just receiving their share. In summary, game developers’ advertising income from foreign networks is generally treated as export income (no VAT), but when it comes to corporate tax, classify it as regular income (no 80% exemption unless perhaps it can be tied to a broader service contract).

Subscription Revenues: Some game companies use subscription models (e.g. monthly premium membership in a game). Tax-wise, subscriptions paid by Turkish users would include VAT and be domestic turnover. Subscriptions by foreign users, or facilitated via platforms, would be similar to one-off sales in terms of tax. For example, if a game on App Store offers a monthly subscription, Apple will collect the fee with VAT for Turkish subscribers (and no VAT for, say, US subscribers) and pay the developer net proceeds. The developer’s share from foreign subscribers – like other app income – is export service income (VAT-free). If the developer runs their own subscription system and charges players directly, they must assess VAT based on the customer’s location (charging VAT to Turkish residents, zero-rating foreign). Each subscription payment is treated as a service provided at that time. As long as the game service is consumed outside Turkey (for foreign subscribers), those revenues can be VAT-exempt. For corporate tax, subscription revenue is just part of taxable income, with export incentives applicable to foreign-derived portions. In Techno-parks, any subscription or microtransaction revenue from a game developed there is fully tax-exempt until 2028 (as it’s income from software development).

Key Takeaways: All these revenue types – app sales, platform revenue shares, in-app purchases, ad income, subscriptions – ultimately contribute to a game company’s profit which is subject to corporate tax. The method of collection mainly affects VAT and who bears compliance. Domestic sales and player spending in Turkey trigger VAT which the company or platform must handle. International sales often qualify as VAT-free for the developer (with the platform handling foreign VAT where applicable). Importantly, Turkey’s tax regime has evolved to accommodate digital revenues: for instance, confirming that app store earnings are considered software exports (thus incentivized).

Game companies must stay mindful of the “beneficial use” criterion for services: e.g., if a Turkish company provides an online service to a foreign client but that service is utilized in Turkey, it might not be treated as export. In the game context, this could arise if a foreign publisher pays a Turkish developer to service Turkish gamers – this might not qualify as export. However, typical scenarios like a foreign publisher hiring a Turkish studio to make a game for global release do qualify as export (service used abroad) and thus no VAT. The digital economy taxation is in flux globally, but as of 2025, Turkish game companies largely benefit from favorable interpretations that minimize VAT and allow significant corporate tax breaks on international earnings.

Example: A Turkish mobile game studio earns $1 million from the App Store in 2025. 60% of this revenue comes from players outside Turkey, 40% from Turkish players. Apple collects payments: for Turkish users, Apple charged 18% VAT (which Apple will remit in Turkey), for foreign users no Turkish VAT was charged. Apple then pays the developer $700k after its commission. The developer’s accounting: roughly $600k of this is from foreign users, $400k from Turkish users (Apple provides breakdowns). The $600k is export income – the developer invoices Apple Ireland for that amount, with no VAT. The $400k from Turkish users – Apple already included VAT, so effectively ~ $338k plus $62k VAT was collected; Apple remitted the VAT, and the developer’s portion of that $400k gross is still part of the $700k payout (the commission affects calculations, but for simplicity assume these proportions). The developer will declare the entire $700k (TRY equivalent) as revenue. For VAT, the developer itself doesn’t file anything for the foreign portion (Apple handled it), and Apple handled Turkish VAT – so the developer’s VAT responsibility is nil in this scenario. For corporate tax: assume expenses of $300k, so profit is $400k. The $600k export-derived revenue can benefit from the 80% exemption: only $120k of profit from that portion is taxable. The remaining $100k profit comes from Turkish sales (since Turkish-sourced revenue doesn’t get the special exemption). Total taxable profit = $220k. At the standard 25% CIT, that’s $55k tax. However, because the company is an exporter, the $120k portion could be taxed at 20% instead of 25%, further reducing tax to ~$49k. Without incentives, tax would have been $100k on $400k profit. Thanks to these digital-friendly rules, the studio saved about 50% of its corporate tax. Meanwhile, Turkish VAT was paid on domestic user spending (by Apple in this case, but ultimately by the Turkish consumers). This illustrates how cross-border digital sales can be quite tax-efficient for developers under Turkey’s current system.

3. Tax Advantages for Companies in Techno-parks, R&D Centers, and Free Zones

Turkey offers substantial tax incentives to technology companies, including game developers, through special zones and statuses like Technology Development Zones (Techno-parks), R&D Centers, and Free Zones. These incentives aim to spur R&D, innovation, and exports. Below, we outline the benefits available to a game company operating under each of these regimes.

Techno-parks (Technology Development Zones): A Techno-park is a specially designated area (often attached to a university or tech hub) where tech companies enjoy tax exemptions under Law 4691. If a game company is located in a Techno-park and engages in R&D, software development, or design activities, it can avail corporate and income tax exemptions on those activities’ income until 31 December 2028. Specifically, 100% of the profits derived from software development and R&D activities in the zone are exempt from corporate income tax. This means if a game studio in a Techno-park produces a game (or provides software services) and sells it, the profit from that sale is not taxed at all until the end of 2028. The exemption is applicable to income exclusively from activities carried out within the zone – any revenue from business activities outside the zone would be taxable normally, so companies must segregate zone vs. non-zone income in their accounting. In practice, many game companies base their development teams in Techno-parks to ensure the revenue from the games they create there is tax-free.

In addition to corporate tax relief, Techno-park companies get relief on withholding taxes for employees. Salaries of employees engaged in R&D, software, and design work in the Techno-park are 100% exempt from income tax until end-2028. The employer still withholds income tax on the payroll, but it is not paid to the tax office; instead, it is shown as a deduction on the withholding tax return (effectively forgiven by the government). For example, a game programmer in a Techno-park might normally have, say, TRY 5,000 income tax withheld from their monthly salary, but thanks to this incentive, that entire amount is not remitted and can be given to the employee or kept by the employer (practically, employers typically structure it so the employee takes home a higher net pay). This incentive significantly reduces labor costs for companies and increases net pay for technical staff. It’s noteworthy that this tax break also applies to support personnel (e.g. administrative staff) up to 10% of the R&D staff count, meaning a Techno-park company can also hire some administrative employees whose wages enjoy tax exemption (capped by that ratio).

VAT Exemption is another benefit: Deliveries of certain software and R&D services produced in the Techno-park are exempt from VAT as long as the corporate tax exemption is in effect (until end-2028). The law specifically lists software products like system management, data management, business application, sector-specific software, internet, mobile and military software – these, if developed in the zone, can be sold VAT-free domestically. Essentially, normally a domestic sale of software would incur 18% VAT, but if it’s developed in a Techno-park and falls in those categories, the sale can be made without VAT. If the software is exported, it would be zero-rated anyway under general VAT rules, so this mainly benefits domestic sales of software. For game developers, if the game (or software service) they create in the zone is sold to a customer in Turkey (for instance, licensing a game engine to a Turkish company), they wouldn’t have to charge VAT on that sale, provided it qualifies under those categories.

Furthermore, Social Security Premium Support is given under Law 5746 (R&D incentives) to Techno-park companies: 50% of the employer’s social security contributions for each R&D and software employee is paid by the government for a period of 5 years per employee. In other words, the company only pays half of the employer’s SGK premium for those workers. For example, if the employer’s share of monthly SGK for a developer is TRY 2,000, the government covers TRY 1,000 of that for 5 years. This reduces salary overhead considerably. This support applies to employees whose income tax is exempt (i.e. the R&D/design staff) and is limited to 5 years for each person. Techno-park firms often take advantage of this, particularly in high-salary contexts, making technical hires significantly cheaper.

Other Techno-park benefits include customs duty exemption for research-related imports (useful if hardware or devices need to be imported for development/testing) and regulatory flexibility such as allowing university academics to work on projects part-time or full-time in companies with eased bureaucracy. Also, Techno-park law allows R&D personnel to work outside the zone (remotely) for a certain percentage of their time with approval, without losing the incentives – a helpful provision for flexible work arrangements.

R&D Centers: An R&D Center is a status granted by the Ministry of Industry and Technology to companies that meet certain R&D personnel thresholds (historically 30 full-time R&D staff, now reduced to 15 for software/IT companies). Game companies that grow larger sometimes opt for this if they are not in a Techno-park. Under Law 5746, approved R&D Centers enjoy:

• 150% R&D Deduction on eligible R&D expenditures (or 100% additional deduction on top of normal expensing). In practice, all R&D expenses are first recorded normally (reducing profit), then on top of that, 100% of those expenses can be deducted again from the taxable profit. This can even create a tax loss that carries forward. This incentive effectively reduces corporate tax if the company is profitable, by allowing them to double deduct R&D costs.

• Income Tax Withholding Incentive for R&D staff: Similar to Techno-parks but with different rates. For R&D center employees, 95% of income tax is waived for those with PhD (doctorate), 90% for those with a master’s degree, and 80% for others. These percentages of the calculated tax are not paid to the state. The company still withholds from salary, but then deducts these amounts on the payroll tax return (so effectively, employees still see the tax withheld on paper, but it is returned/never paid). In some cases, companies choose to give the benefit to the employee by paying them a higher net salary equivalent to the tax saved. In any event, the cost to the employer is reduced. For example, an R&D center programmer with a bachelor’s degree would effectively have 80% of their income tax forgiven, so only 20% of normal tax is paid. If monthly tax would be TRY 1,000, only TRY 200 is paid. For a PhD holder, only 5% is paid (TRY 50 in that case). This incentive currently runs until 31 Dec 2028 (the law’s duration was extended).

• Social Security Premium Support: The Treasury covers 50% of the employer’s social security contributions for R&D center employees (again like Techno-park) for 5 years for each employee. This is also under Law 5746. The implementation details are essentially the same: the company pays only half of the employer SGK premium for R&D staff, within the 5-year per person limit.

• Stamp Duty exemption: Documents and contracts related to R&D projects in the center are exempt from stamp duty (a minor tax on documents).

• Techno-venture capital support: If the company invests in other tech startups or funds (certain percentages of their tax-saved profits), there are extra deductions allowed (introduced in 2021). Large companies often use this to invest in venture funds to fulfill obligations tied to enjoying large tax breaks.

One difference: R&D centers do not automatically exempt any portion of profits from corporate tax like Techno-parks do. Instead, the fiscal benefit comes via the R&D deduction (which lowers taxable profit) and some minor additional incentives like those for capital investment or increased R&D spending (there’s an additional deduction if you increase R&D spend significantly year-over-year). If a game company’s entire activity is R&D (no other revenue), in theory, with 150% deduction they might pay almost no corporate tax because their expenses will wipe out most profit. But if they generate substantial profit beyond R&D expenses, that profit is taxed (unless they also qualify for the separate 80% export exemption, which they often can if it’s software exports).

The threshold for an R&D center (staff count requirement) has been lowered to encourage more mid-sized tech firms to apply. Many game companies start in a Techno-park; if they later leave (maybe to scale elsewhere) and have enough staff, they might certify as an R&D Center to keep many of the tax benefits.

Free Zones: Free Zones are special export-oriented zones governed by Law 3218, typically near ports or specific areas. They provide broad incentives mainly for manufacturing and trading companies, but can include services like software. The key benefit is exemption from corporate income tax on income from export activities conducted in the zone. For manufacturing companies, if at least 85% of the production is exported, profit is CIT-exempt indefinitely. For service companies (including software), Turkey introduced a provision (in 2008 and updated 2015) that if they obtain a special operating license in the free zone and export at least 85% of their services, they similarly can get CIT exemption on that income. A game development firm in a free zone, selling its games primarily to foreign customers, can thus effectively pay 0% corporate tax on those profits, similar to a Techno-park (but with the export ratio condition). Additionally, transactions in free zones are exempt from VAT, customs duties, and stamp duties. For example, if a game company in a free zone buys computer equipment or imports motion capture hardware for development, those can enter the zone without customs tax and VAT.

Free zone companies also historically had an income tax exemption for employees’ wages (an incentive that ended for new entrants after 2008, but existing beneficiaries were grandfathered until 2024–2025). Specifically, software companies that started in a free zone before 2008 could not pay income tax on wages of their engineering staff engaged in exports. However, since Techno-park law overlaps and generally provides more, new game firms rarely choose a free zone solely for tax, especially because Techno-parks are tailored for tech and often located in major cities/university areas (where talent is).

In summary, for a game company:

• Techno-park is ideal during development phases: full tax holiday on software/R&D income, staff tax-free, half SGK, until 2028 (subject to extension).

• R&D Center is useful if not in a zone but large enough: it gives substantial tax deductions and staff incentives, but not as outright generous as Techno-park (effective tax reduction rather than 100% exemption).

• Free Zone could be beneficial if a company focuses on export markets and perhaps needs to import/export tangible goods or likes the long-term nature of free zone incentives (which historically had no sunset for qualified companies, whereas Techno-park incentives currently sunset in 2028 unless extended). But establishing in a free zone might be less convenient for daily operations (as these zones are regulated, physically secured areas often away from city centers).

Comparison: A Techno-park company might pay zero tax on profits and have zero income tax on staff, whereas an R&D center company might pay some tax but still significantly less due to deductions, and a free zone company must ensure it exports most of its output to maintain the tax exemption. Many successful Turkish game companies initially operate in Techno-parks (e.g., Peak Games started in a Techno-park incubator, benefitting from no taxes during its growth). This policy environment is considered a reason Turkey’s game sector became attractive to investors (profits were largely reinvestable due to tax exemptions).

Below is a summary table of incentives in different regimes:

Table: Tax Incentives by Location/Status

Incentive Aspect	Techno-park Company	R&D Center (Law 5746)	Free Zone Company
Corporate Tax	0% on qualified R&D/software income until 31/12/2028. (Profit from tech activities in zone is exempt.)	No direct exemption, but 100% of R&D expenditures are extra deductible (so taxable profit is greatly reduced). Also can use 80% export exemption on software service income plus 5pt rate cut, yielding effective ~5% CIT if mostly exports.	0% on income from exports if ≥85% of revenue is export. (Zone authority approval needed.) Domestic sales still taxable. No set end date for exemption (policy subject to periodic renewal).
Employee Income Tax (Withholding)	100% exemption for R&D, software and support staff salaries until end-2028. (No income tax withheld/remitted on those wages.)	95% exemption on PhD holders’ salary tax; 90% for MSc; 80% for BSc/others. Company withholds but 80-95% of tax is forgiven (until 2028). Techno-park staff get 100% in any case under 4691 law.	Historically 100% exemption on wages for export-related staff for companies licensed before 2009. After 2009, no new wage exemption (except some specific cases). So most new free zone companies pay normal payroll tax.
Social Security Premium (Employer)	50% of employer’s share is paid by Treasury for each R&D/design employee for 5 years. (So employer pays half the normal amount for those staff.)	50% of employer SGK is covered by government for R&D/design staff (5-year per person limit, as per Law 5746). Same benefit, implemented via reimbursements.	No special SGK discount solely for being in free zone. General employment incentives can apply, but zone itself doesn’t grant SGK cuts. (Manufacturing in some zones might have separate deals, but not standard.)
VAT	Exempt on sales of software, R&D services developed in-zone (until 2028). Also, services to foreign clients are zero VAT as exports. Purchases for R&D projects can be VAT-exempt (if imported, via customs exemption).	No zone, so no blanket VAT exemption on domestic sales. But exports of services are zero-VAT by general rule. R&D projects may reclaim input VAT via other incentives (e.g., if they have Techno-venture support or incentive certificates).	Goods and services sold from the zone abroad are VAT-exempt (technically outside Turkey’s customs area). Domestic sales into Turkey from zone would incur import VAT to the buyer. Purchases into zone are VAT-free.
Other	Customs duty exemption on R&D-related imports; no stamp duty on project paperwork. Academic collaboration allowances (faculty can work in company easily); flexibility for remote work (some R&D allowed outside zone)	50% additional deduction if R&D spend increases ≥20% y/y (until 2028); stamp duty exemption for R&D contracts; possibility to claim support for tech venture investments (if company invests in startups, can deduct those investments). Must maintain required FTE R&D staff to keep status.	Free zones often have simplified trade procedures, lower bureaucracy, ability to transact in FX. Long-term legal stability (incentives historically extended in 10-year blocks). 100% foreign ownership allowed (as everywhere in TR). Profit repatriation is free of restrictions.

4. Grants and Support Programs (TÜBİTAK, KOSGEB, Ministry of Trade, Industry Ministry)

Beyond tax relief, game companies in Turkey can tap into a variety of grants and incentive programs offered by government institutions. These aim to provide funding, reduce costs, and accelerate growth for companies in the gaming and software industries. Key institutions include TÜBİTAK (Scientific and Technological Research Council), KOSGEB (Small and Medium Enterprises Development Organization), the Ministry of Trade, and the Ministry of Industry and Technology. Below, we outline major programs relevant to game developers.

TÜBİTAK (Scientific R&D Grants): TÜBİTAK is Turkey’s primary science and research funding agency and plays a major role in supporting tech projects. For game companies, the TÜBİTAK TEYDEB programs are particularly significant:

• TEYDEB 1507 – SME R&D Start-up Support: This program is targeted at small and medium enterprises undertaking R&D projects. It provides a grant (non-repayable) covering 75% of eligible project costs, up to a budget limit of TRY 3,000,000 per project. (The limit and percentages can be updated; currently 3M TL as per official TÜBİTAK announcement for recent calls.) This is ideal for a small game studio developing a new technology (game engine, AI module, etc.) or an innovative game project. TÜBİTAK’s priorities include digital game technologies, and indeed 1507 and its sister program have been used to fund game development efforts. Under 1507, the company must submit a detailed R&D project proposal (e.g., developing a new multiplayer networking architecture or AR game platform), which goes through evaluation. If approved, TÜBİTAK will reimburse 75% of expenses like personnel salaries, equipment, software licenses, materials, testing services, even patent or consultancy costs related to the project. For example, if a studio undertakes a TRY 2M project to create a new game engine, TÜBİTAK could grant up to TRY 1.5M of that. The program typically disburses funds in tranches as the project meets milestones.

• TEYDEB 1501 – Industrial R&D Support: This is a broader program not limited to SMEs (large firms can apply too). It has no fixed upper budget limit per project and tends to fund larger-scale R&D projects. The support rate is generally 60% for large firms (and can be ~75% for SMEs even under 1501). A big game company developing, say, a novel game distribution platform or advanced graphics technology could utilize 1501. The application and evaluation process are similar to 1507, but expectations and scale are higher.

TÜBİTAK provides these grants as matching funds – the company must finance the remaining percentage of the project. Importantly, any company receiving TÜBİTAK R&D grants also automatically benefits from Law 5746 R&D tax incentives during the project (even if they are not an official R&D center), meaning salaries paid within the project are income tax-exempt and premiums are half-paid by the state. This creates a synergy between direct funding and tax relief.

Another relevant TÜBİTAK program is 1512 – BİGG (Individual Young Entrepreneur Grant). This is essentially a startup grant for tech entrepreneurs. Under BİGG, TÜBİTAK awards capital grants (currently around TRY 450,000) to innovative startup ideas to help them incorporate and develop a prototype/product. Over the years, several game startups in Turkey have benefited from this to get initial funding. The program runs through accredited incubators and universities that help select and coach applicants. A game idea with technological innovation (for instance, a VR game platform or a game with novel AI) could win this grant, which is non-dilutive seed funding to establish the company. The BİGG program has regular calls and is highly competitive but provides a critical lifeline for early-stage companies that might not yet attract investors.

TÜBİTAK also occasionally has calls targeting specific thematic areas – it might issue a call for proposals under titles like “digital games”, “metaverse and gaming technologies”, etc., depending on national priority areas. Moreover, TUBITAK 1505 University-Industry collaboration and TUBITAK 1511 Sectoral Programs might also fund projects where game tech intersects with academia or targeted sectors (e.g., educational games under an education call).

KOSGEB (SME Supports): KOSGEB’s mission is to support small businesses and entrepreneurs. For game companies, KOSGEB has several relevant supports:

• Entrepreneurship Support Program: Within this, the Traditional Entrepreneur and Advanced (İleri) Entrepreneur schemes provide grants to new startups. Game studios usually fall under “Advanced Entrepreneur” because software development is considered a medium/high-tech activity. As of 2025, an advanced entrepreneur can receive up to TRY 375,000 in grants. This includes various components: a startup grant of 10k TL for establishment costs, performance-based grants (20k–40k TL) if certain turnover or employment targets are met, equipment/machinery grant up to 150k TL (for purchasing hardware, software, etc.), and training/consulting support up to 10k TL. All these add up to the 375k total. For example, if a team forms a new game development LLC, they can get 10k TL to cover company registration and initial expenses, then as they operate, if their revenue crosses set thresholds, KOSGEB will give performance bonuses (say 20k after reaching one milestone, 20k after another), and if they buy computers or software licenses, KOSGEB will reimburse 75% of those costs up to 150k. They can also claim some money back for attending training or getting mentoring services. These grants are non-repayable and are intended to ease the startup’s burdens in the first couple of years. To qualify, the entrepreneur must complete KOSGEB’s entrepreneurship training (available online), and the business activity must be in KOSGEB’s supported sectors list (writing software, including games, is supported).

• R&D, Innovation, and Industrial Application Support: KOSGEB also offers project-based support for innovation. If a game company, even after startup stage, has an innovative development project (that perhaps isn’t large enough for TÜBİTAK or is more market/application-oriented), they can apply to KOSGEB for R&D support. Typically, this can provide around TRY 300k as a grant and additional zero-interest loans. These figures are periodically updated. It’s slightly overlapping with TÜBİTAK’s domain, but KOSGEB might fund smaller-scale development or commercialization efforts that TÜBİTAK won’t.

• KOSGEB SME Development supports: These include various smaller supports, e.g., Overseas Fair Participation Support (reimburses a portion of costs for attending trade fairs abroad, up to ~100k TL), Overseas Business Trip Support (for B2B events, etc., up to 90k TL), and Qualified Personnel Employment Support (provides up to 50k TL to subsidize the first-year salary of each newly hired qualified employee, e.g., someone with a university degree). For instance, if a game studio hires a computer engineer, KOSGEB might reimburse 50% of their salary for the first year, capped at 50k TL. These are part of KOSGEB’s “General Support” portfolio and have their own application requirements (typically the company must be within KOBİ limits).

• COVID and Other special supports: In recent years, KOSGEB had special loan programs (0% interest loans) for certain sectors or crises, which game SMEs could also benefit from if eligible. While not specific to games, being aware of these can help a company’s cash flow.

Essentially, KOSGEB is the address for grants to new businesses and small-scale project financing. Many small game studios have started with KOSGEB’s startup grants in addition to or instead of TÜBİTAK’s startup grants. The advantage is KOSGEB’s process can be somewhat simpler for very small teams, though the amounts are smaller than TÜBİTAK’s R&D grants.

Ministry of Trade – Service Export Incentives: The Ministry of Trade (through its General Directorate of International Services Trade) runs a comprehensive incentive program for exporters of services, including the IT and game sector. Recognizing that the game industry brings in foreign currency as a subset of “software” and “entertainment services,” the ministry included game companies under Decision No. 2015/8 and subsequent “Turquality and Sectoral Branding for Bilişim (IT)” supports. The program was refreshed in 2022 and 2023 (often referred to as “Bilişimin Yıldızları” program) with significantly increased limits by 2025. Key support items for game developers include:

• Overseas Promotion and Marketing Support: This covers expenses like digital marketing, advertising campaigns, PR agency fees, demo/launch events abroad, etc., at 50%–60% reimbursement. Each company has an annual cap (which by 2025 has been increased to very high levels, e.g. TRY 57 million for general marketing as per unofficial sources). Practically, this means a game company spending on Facebook/Google ads to acquire foreign users can get half that money back from the government. Or if they hire a marketing firm in the US to promote their game, half of that cost is refunded. It’s a huge boon for scaling user acquisition. The support is provided after the company submits proof of expenditures and a report of the results.

• New Employment Support: The ministry encourages companies to hire employees with foreign language or international business skills to boost exports. Under this, a company can receive 50% (up to 60% in some cases) of an employee’s gross salary subsidized for 2 years (with possibilities to extend), for up to two employees dedicated to international business development. The cap per person is given as $25,000 per year (which has been converted to ~TRY 1.37 million in 2024). For example, a game studio hires a business development manager and a community manager who both speak English (or other languages) to grow their international presence – the ministry will reimburse half their salaries, each up to ~TRY 1.37M. In USD terms originally it was $50k/person/year. This essentially helps cover the cost of two full-time staff focused on export markets, such as international marketing, support, or localization specialists.

• Commission Fee Support (App Store/Platform fees): Uniquely, the Turkish government offers to soften the blow of platform commissions (like the 30% cut by app stores). For mobile app, digital game, and software companies, platform commissions paid to distributors (Apple, Google, Steam, console stores) are 50% reimbursable. There is an upper limit per year per company (which sources say is TRY 16 million of commission expenses as of 2025). Essentially, if a game company paid, say, $1 million to Apple/Google in revenue share over the year (meaning they grossed significantly more), they could get $500k of that back. This is extremely beneficial for mobile game companies, effectively reducing the app store fee from 30% to 15% from the company’s perspective.

• Overseas Office (Yurtdışı Birim) Support: If a game company opens an office or hires a coworking space abroad to support its operations (common for business development or user acquisition in key markets), the rent and basic operational costs of that overseas office are 50% reimbursed, up to a certain dollar limit per year (commonly $120k per year per office for up to 5 years, for example). Many Turkish game companies opened small offices in the US or Europe to qualify and to boost their global reach.

• Overseas Fairs and Travel: Attending international gaming expos or conferences (like GDC, Gamescom) is also subsidized. Booth rental, travel, and accommodation for such events can often be reimbursed 50%, within set limits (which might be, e.g., $15k per event).

• Branding and IP Support: Registering trademarks or patents abroad (like protecting a game’s IP in other countries) is 50% supported up to certain limits (perhaps $50k total).

• Consultancy and Certification: If a game needs some international certification or if the company hires consultancy for market research, those costs can also fall under support at 50%.

The support rate is usually 50%, but if the company is part of a Turquality program or UR-GE cluster project (organized by the ministry to group companies), the rate can go up to 60%. Each support category has annual ceilings. By 2025, recognizing high inflation, these ceilings were dramatically raised in TL terms, hence numbers like 16M TL or 57M TL showing up, which in USD approximations tie back to previous $ figures.

To access these incentives, companies must apply through the Ministry’s online portal (known as “DYS” – Incentive Management System). They typically must first register as a “service exporter” and get a “Supported company” status. Often, companies produce a marketing plan or branding project that gets pre-approved for some supports (some supports require pre-approval, others allow spending then applying). Once approved, the company incurs expenses, pays them, then submits proof (invoices, payment receipts) to the Ministry, which then reimburses the 50% share to the company in TL (some months later).

For game studios, these supports significantly reduce go-to-market costs. Many mid-to-large Turkish game companies (especially mobile game developers) have leveraged them to scale user acquisition worldwide essentially at half cost. The program is one reason Turkey’s mobile game sector thrived – the state is effectively co-investing in their growth.

Ministry of Industry and Technology Programs: While this ministry mainly deals with R&D and industrial supports (like Techno-parks and R&D centers discussed above), it also runs innovation grant schemes sometimes in partnership with others:

• Techno-venture Capital Support (Teknogirişim Sermayesi): In the past, this was a direct grant of TRY 100k to young entrepreneurs to start tech companies. It has since been integrated into TÜBİTAK’s 1512 program, but the Ministry still oversees aspects of it. Some universities still refer to it as Teknogirişim funding. If a game developer (fresh graduate) had an idea, they could get this grant to start – now replaced by the bigger 1512 grant.

• Development Agencies: Turkey has regional development agencies that sometimes open calls for projects or give small grants for creative industry projects in their region. For example, Istanbul Development Agency (ISTKA) or others might have had a call for “creative digital content” where game projects could apply for grants. These are sporadic but worth noting.

• Investment Incentive Certificates: If a game company invests in a fixed asset (like building a data center, or constructing a large motion capture studio, etc.), they might apply for an investment incentive certificate. This isn’t a grant but provides tax credits (e.g., reduced corporate tax on profits from that investment by a certain rate, VAT exemption and customs exemption on imported machinery, support on interest, etc.). Purely software development usually doesn’t require heavy fixed investment, so game studios rarely need this. But a company doing, say, console manufacturing or something might.

Summary of Grants/Incentives: A game company in Turkey, depending on its size and life stage, can benefit from:

• Startup grants: e.g., TÜBİTAK 1512 ( ~ $15k initially, now ~ $30k), KOSGEB Entrepreneur (up to ~$14k).

• R&D project grants: e.g., TÜBİTAK 1507 (up to ~ $100-150k), 1501 (no limit but high budgets often $300k+ with ~60% co-funded by TÜBİTAK).

• Commercialization/marketing supports: e.g., Min. of Trade incentives covering half of marketing and distribution costs (worth hundreds of thousands of dollars).

• Continuous tax breaks: Techno-park / R&D center tax holidays which amplify the effect of those grants by allowing reinvestment of profits rather than paying taxes.

It’s common for companies to layer these supports. For instance, a small game studio might start with a KOSGEB or TÜBİTAK grant to build a prototype, use Techno-park tax exemptions to not pay taxes as it grows, and then use Ministry of Trade supports to market the game abroad.

Below is a table summarizing some of these key programs:

Table: Major Grants and Incentives for Game Companies

Provider & Program	Type of Support	Details and Limits
TÜBİTAK – 1507 SME R&Dtubitak.gov.tr	R&D Grant (Project)	~75% grant for R&D projects by SMEs. Max project budget ₺3M, grant is non-repayable covering up to ₺2.25M. Supports game tech development (AI, engine, etc.) projects.
TÜBİTAK – 1501 Industrial R&D	R&D Grant (Project)	60–75% grant for larger R&D projects (no fixed budget cap). Suitable for bigger companies or ambitious projects. (E.g., a large-scale game platform R&D.)
TÜBİTAK – 1512 BİGG	Startup Grant	~₺450,000 capital grant for innovative startups. Requires business plan and acceptance via approved accelerator. Helps launch a game startup (no equity taken).
KOSGEB – Advanced Entrepreneur	Startup Grant	Up to ₺375,000 for new tech startups. Includes: ₺10k for incorporation, ₺150k for machinery/software, ₺20-40k performance bonus, ₺10k consulting. Must complete KOSGEB training; 75% of costs covered.
KOSGEB – R&D/Innovation Support	R&D Grant/Loan	Typically ~₺300k grant + optional loan for SMEs innovating new products. Can support game development projects not covered by TÜBİTAK.
Min. of Trade – Tech Dev. & Export Support	Multiple (grants)	Personnel: 50-60% of two employees’ salary reimbursed (up to ~₺1.37M per person/year).

Marketing: 50-60% of overseas advertising, marketing spend refunded (limits updated annually, e.g., TRY 57M cap in 2025).
Commission: 50% of App Store/Google/Steam fees back, up to ~TRY 16M in fees/year.
Overseas office: 50% of rent and expenses (e.g., $10k of $20k).
Fairs: 50% of booth, travel costs (cap per event).
(Requires application to Ministry; reimbursements paid in TL.) | | Min. of Industry – Techno-Initiative | Startup Grant (historical) | ~₺100k for young entrepreneurs (now largely replaced by TÜBİTAK 1512). Some universities still offer this to students starting game projects. | | Development Agencies | Project Grants | Regional grants (varies by province and year). E.g., Istanbul’s agency might fund a serious game project for education up to ₺500k at 100% rate. Competitive calls, not regular. | | Investment Incentive Certificate | Tax Relief/Support | For large investments (e.g., building a game studio campus or motion capture facility). Provides VAT/customs exemption on equipment, and tax credits on profits from the investment (e.g., 70% CIT reduction until certain amount). Rarely used solely for software but can apply if hardware involved. |

5. Incentives for Employment: Social Security Premium Cuts and Income Tax Support

Hiring skilled personnel is one of the largest costs for game companies. The Turkish government offers a variety of incentives to reduce employment costs, from general schemes for all sectors to specific ones for R&D and tech jobs. Here we detail how game studios can benefit when employing staff.

Social Security Premium Incentives: In Turkey, employers must contribute to social security (SGK) for each employee (currently around 20.5% of gross wage for employer’s share, plus 14% withheld from employee). To encourage job creation, Turkey has many premium reduction schemes:

• The universal 5-point SGK discount: All employers who are up-to-date with their payments get a 5 percentage-point reduction in the employer’s SGK contribution for each employee. Essentially, instead of paying 20.5%, they pay 15.5% of gross wage, with the Treasury covering that 5% difference. This is a permanent, across-the-board incentive and game companies automatically benefit as long as they pay on time.

• Additional Employment Incentives (e.g. 17103, 27103): There have been various time-limited programs where if you hire a new employee above your previous headcount, the government covers the entire employer’s SGK (and sometimes even income tax) for that employee for a certain period (6, 12, up to 18 months). Specific schemes target different groups, such as young workers (under 25), women, or those unemployed for a while. For instance, one program covers full employer SGK for 12 months for each new employee hired in 2018-2020 (for companies that increased employment) – many of those were extended. A current example is 27103 incentive: if you hire someone who was unemployed and meet criteria, for their first 12 months the employer pays 0 SGK (the government pays it).

• Apprentices and Interns: Hiring students or recent graduates as interns or under vocational training agreements can also get SGK support (often the state pays their minimal insurance during internship).

• Disabled Employee Incentive: If a company employs people with disabilities (over a certain quota), the entire employer SGK for those individuals is paid by the government indefinitely.

While these are general, game companies, being often small/medium and keen on hiring youth, frequently utilize them. For example, if a game studio of 10 people decides to hire 2 more fresh graduates, there might be an incentive such that for those 2 hires, for a year the studio doesn’t pay SGK contributions (saving ~20% of their salary cost). The specifics require checking current laws, but HR consultants in Turkey actively help companies claim these.

Techno-park and R&D Center Premium Support: As discussed in section 3, employees working in Techno-parks or certified R&D/Tasarım Centers receive a 50% employer social security subsidy for 5 years per employee. This is arguably even more beneficial in the long run than the short-term general incentives. In Techno-parks, this covers all R&D and support employees; in R&D centers, all R&D and design employees. The government directly covers half of the employer’s SGK contribution. For instance, if the employer cost for SGK is TRY 1,000 per employee per month, only TRY 500 is actually paid by the company. Over 5 years per person, that’s TRY 30,000 saved per person (assuming constant 500/mo). A company must apply and be approved for this support (Techno-park companies usually get it automatically via Techno-park management’s coordination with SGK; R&D centers apply via the Ministry).

Income Tax Withholding Support for Employees: The major incentive here is the income tax exemption for tech zone and R&D center employees.

• In Techno-parks: As noted, employees (engineers, developers, etc.) working on R&D or software projects have 100% of their income tax on salaries waived until 2028. Practically, the company calculates the payroll tax but then deducts the full amount due as “not payable” on the withholding return. So the company doesn’t incur that cost. Typically, companies pass that benefit to employees by offering them higher take-home pay (negotiations vary; some might keep part of the savings). But effectively it lowers the cost of employing a developer by ~15-20% (since normally that portion of gross would go to tax).

• In R&D centers: The exemption is partial – for a given R&D employee, the company can refrain from paying 80%, 90%, or 95% of the withholding tax depending on their education level. This means an entry-level developer’s income tax is 80% waived, a master’s degree holder’s is 90% waived, etc. The company only remits the remainder. If a developer’s monthly income tax would be TRY 2,000, and they are a bachelor’s grad, the company only pays TRY 400 to the tax office, saving TRY 1,600 which can be given to employee or kept. If they have a PhD, only TRY 100 would be paid (5%). This incentive, like others, is slated through 2028 and has been extended historically. It’s a significant reason tech/R&D jobs in Turkey often net more than equivalent non-tech jobs for the same gross pay.

One should note a change in 2025: Starting from August 2025, the government introduced a cap on the salary amount eligible for this income tax incentive. Specifically, they will only allow the incentive on the portion of an employee’s gross wage up to 40 times the monthly minimum wage. Any salary above that threshold gets normal taxation on the excess. For 2025, with minimum wage around TRY 15k, 40x is ~ TRY 600k monthly (~USD 22k monthly, which is very high). This means only extremely high-paid R&D staff (which is rare in Turkey’s game industry) would hit the ceiling. Essentially, it prevents, say, a company from paying a superstar developer an enormous salary and getting all of it tax-free. Regular developers and even well-paid senior staff won’t hit that cap, so practically it doesn’t reduce the benefit for game studios (it’s more relevant to some multinational R&D centers with foreign staff).

Other labor supports:

• Unemployment Agency (İŞKUR) training programs: If a company hires an unemployed person and provides them on-the-job training, İŞKUR can pay their stipend for a few months. Some game companies have used these to bring on trainees or test new hires at no initial cost.

• First-time employment of women or youth: As part of general policy, hiring women or young people often triggers longer incentive periods under the schemes mentioned (like extending the SGK support from 12 to 18 months).

Effect on game companies: The tech industry significantly benefits from these because tech wages are relatively high, so the absolute savings per employee are big. For example, imagine a game studio employs 5 programmers each with a gross salary of TRY 20k (approx net ~TRY 14k without incentives). Normally, the company would pay ~TRY 4k in employer SGK and perhaps withhold ~TRY 3k income tax per person (numbers illustrative). With Techno-park incentives, the ~TRY 3k tax is saved and half of the ~TRY 4k SGK (so ~TRY 2k) is saved. That’s ~TRY 5k saving per employee per month, i.e. ~TRY 60k/year each. Across 5 developers, that’s TRY 300k/year the company doesn’t pay to the government. This money can either improve the employees’ net pay (helping retain talent) or reduce the company’s cost, or a mix of both. Over time, these incentives accumulate, letting game studios hire more people than they otherwise could with the same budget.

Many foreign observers point out that Turkish game studios effectively have “lower labor costs” not only because of exchange rates but also because their engineers are partially state-subsidized via these tax breaks. It’s a key competitive advantage enabling faster growth.

Example: Consider a mid-sized game development firm with 30 employees, all engineers/designers, located in a Techno-park. Without incentives, suppose the company’s total annual payroll (gross) is TRY 15 million. The employer would ordinarily owe around TRY 3 million in SGK premiums and withhold perhaps TRY 2.5 million in income taxes from salaries (just an estimate). Thanks to Techno-park incentives: the entire TRY 2.5m income tax is waived, and half of the TRY 3m SGK (so ~1.5m) is covered by the state. That’s ~TRY 4 million saved. In effect, the company’s labor cost is reduced by roughly 25%. They could use that to hire additional staff (maybe 7-8 more developers) or invest in other areas like marketing. This demonstrates how Turkey’s incentives directly impact a game firm’s capacity to scale.

6. Special Considerations for Startups, SMEs, and Large-Scale Firms

The gaming industry in Turkey spans scrappy 2-person indie studios to large companies with hundreds of employees. The regulatory and support environment often differentiates based on company size (startup, SME, large firm). Here we compare how these different scales experience the tax and incentive system.

Startups (Early-stage companies): Startups are typically newly founded, often pre-revenue or just starting to earn revenue, and often are in the form of a small Limited Company or even operating as sole proprietorships initially. Turkey offers some special breaks for new ventures:

• As mentioned, a young individual entrepreneur (sole proprietor under age 29) gets up to ~TRY 330k of profit per year tax-free for 3 years, plus one year of social security contributions (Bağ-Kur) paid by the state. While most serious game startups incorporate as a company (to access investment, limited liability, etc.), this could benefit a solo developer launching a mobile game on their own initially.

• New incorporated companies don’t have a specific income tax holiday (apart from general incentives like Techno-park if they join one), but they often receive support in terms of fee waivers – e.g., if they register in a Techno-park incubator, sometimes their first year office rent is free or subsidized by the park or university.

• Accounting and compliance for very small companies: If an indie developer’s revenue is below certain thresholds, they might not be forced into the VAT system (there was a recent rule allowing certain low-revenue digital content creators to be taxed via withholding by platforms instead of filing VAT/GST – e.g., YouTubers, which could include a game developer selling through an intermediary platform under a threshold). But for most professional operations, they register for VAT from the start.

• Startups usually reinvest all earnings and often run at a loss initially (due to development costs). In Turkey, tax losses can be carried forward for 5 years to offset future profits. This is useful – e.g., a startup that spends heavily on a game for 2 years with no profit can carry those losses to deduct from the year it finally earns revenue.

• VC Investment: Early-stage companies often get foreign or local VC investment. Turkey doesn’t levy tax on receiving equity investment (that’s capital, not income). Also, to ease this process, Turkey allows foreign currency share capital so startups can directly take USD/EUR investments.

• Cap Table incentives: There is a specific incentive for startups: if an individual (like an angel investor) invests in a startup, they can deduct 75% of that investment from their personal income tax base, and 100% if the startup is in a Techno-park or certified R&D project. This “Angel Investor” incentive (BRSA certificate required for investor) has drawn some domestic angel investment to startups. From the startup’s perspective, this doesn’t change their taxation, but it helps attract investors by effectively giving investors a personal tax credit. Many early game startups have leveraged this by bringing on certified angel investors.

Startups commonly leverage grants: e.g., a fresh game studio might win TÜBİTAK 1512 or KOSGEB startup support (discussed earlier), which are essentially startup-tailored programs. These are not available to older or larger firms.

SMEs (Small and Medium Enterprises): By Turkey’s official definition, SMEs are companies with <250 employees and ≤ TL 125 million turnover (as of recent years). The vast majority of Turkish game companies are SMEs. Being an SME (KOBİ in Turkish) qualifies companies for certain supports:

• KOSGEB programs: Only SMEs can benefit from KOSGEB’s grants and loans. A large company is not eligible for KOSGEB’s offerings. For example, if a game studio grows beyond 250 staff or goes above the turnover threshold, they graduate out of KOSGEB support. But reaching that scale is rare in gaming here (by that point, the company might have been acquired or become international).

• TÜBİTAK 1507 (SME-specific R&D grant) and even in 1501, being an SME can mean a higher funding rate or preferential scoring. SMEs get a 75% grant vs a large firm’s 60% on similar projects.

• Corporate tax reductions: Historically, Turkey sometimes offered reduced corporate tax for certain small companies or new companies (e.g., at one point there was a lower rate for companies under a certain profit level, but that’s not a major current policy except via incentives).

• Simplified procedures: SMEs are exempt from some heavy obligations – e.g., SMEs don’t need independent financial audits (whereas a large joint-stock company would after 2 of 3 criteria like turnover, assets, staff cross thresholds). They can also use simpler accounting standards (financial reporting under local standards rather than full IFRS in some cases).

• Access to finance: The government often provides SME-targeted loan guarantees or subsidized loans. For instance, COSME and local Credit Guarantee Fund (KGF) programs ensure SMEs can get bank loans with government guarantee. A game SME, being typically asset-light, might need to rely on such programs to get a loan (since they have little collateral beyond IP).

• Export supports (Ministry of Trade) apply equally to SMEs and large companies; however, there was a separate “Micro Export” VAT exemption for very small exports (under 300k TL via postal service) introduced to encourage small e-commerce. But for games, the main export supports are not size-limited.

Large-scale firms: There are a few large players in Turkish gaming (e.g., those who achieved “unicorn” status like Peak Games, Dream Games, or major publishers). When a company grows big:

• Some SME-specific supports fall away (as noted, KOSGEB etc.). But by then, they typically have investors or sufficient revenue.

• They can establish their own R&D center (if they have ≥15 R&D staff, which they likely do). So instead of relying on a Techno-park (if they outgrew the need or space), they can enjoy similar tax incentives in their own office.

• Large firms are subject to more regulations: e.g., if they exceed certain size, they must do independent audits, possibly prepare consolidated accounts if they have subsidiaries. Public interest might also mean they face stricter oversight in general.

• Minimum Tax and new obligations: As described in Section 7, starting 2025 large profitable companies will face the 10% minimum corporate tax rule if their incentives reduce tax too much. For example, Dream Games reportedly had huge profits due to Techno-park exemption. If it were outside a Techno-park using just the 80% exemption, from 2025 it would need to pay 10% minimum. Also, large digital companies might come under new global taxation rules in coming years (like OECD Pillar 1, but that’s still in flux).

• Techno-park exit or compliance: A company can theoretically stay in a Techno-park regardless of size (some parks host large corporations). However, if they expand with multiple offices, not all might qualify for the zone benefits (they might then designate just the development office as zone-qualifying).

• Venturing and M&A: Large firms might invest in smaller studios. The law encourages this by letting Techno-park companies keep their exemption only if they invest 2% of large exempt profits into venture funds or startups. Also, Turkey has an “exemption for share sale gains” if a company sells shares of another company it held for 2+ years, 75% of the gain is tax-exempt. This could apply if a big company spins off or sells a game subsidiary or IP.

• Capital Market incentives: If a game company eventually goes public on Istanbul Stock Exchange, there’s a temporary corporate tax reduction for IPO: newly public companies get 2 points off CIT for 5 years, and trading their shares is stamp duty exempt. No Turkish game company has done an IPO yet, but this could be relevant in future.

Differences in government interactions: Startups deal with agencies like KOSGEB, incubators, and TÜBİTAK. Larger companies might interact more with ministries (for R&D center approval, for high-value export credits) and might have dedicated account managers in Investment Office or Development Agencies.

Recap with an example: Suppose we have three companies:

• IndieX: a 2-person startup just formed. They each are under 29 and took advantage of the young entrepreneur scheme as sole proprietors initially (so they pay essentially zero tax on first profits). They won a 200k TL TÜBİTAK BİGG grant to incorporate. They join an incubator in a Techno-park with free desk space. Their compliance is minimal – no independent audit, simple filings, they might even use cash accounting if small enough.

• StudioY: a mid-sized SME with 50 employees and a successful mobile game. They are in a Techno-park, so they pay no corporate tax on game income and no income tax on employees, saving huge costs which they put into user acquisition. They get KOSGEB to partially pay for hiring 5 new grads. They apply for TÜBİTAK 1507 to develop a new game tech, getting 2M TL funded. They also heavily use Ministry of Trade supports: half of their $1M marketing spend and platform fees come back to them. They remain profitable and grow fast partly because of these savings.

• CorpZ: a large company with 300 staff, multiple game titles globally. They maintain an R&D center rather than Techno-park (maybe they needed a bigger office). They still get 80-95% payroll tax exemption for their devs and half SGK off, but now they also had to invest 2% of their big tax-free profits into a startup fund by law (they complied and actually acquired a small studio). Starting 2025, they find that due to minimum tax, their effective tax will be 10% instead of near 0 on profits, except income from their Techno-park subsidiary remains fully exempt. They outgrew KOSGEB support long ago, but they can raise money through corporate bonds or an IPO if desired. They still get, however, unlimited benefit of export incentives for marketing budgets (Ministry of Trade doesn’t restrict large firms, aside from capping amounts per year, which they likely hit the cap in some categories).

From startup to scale-up to large enterprise, the support landscape shifts: more help upfront and in the growth phase, and modest clawback (like min tax) or requirements (like investing in others) when at scale.

In Turkey, SMEs are the primary focus of many support schemes (KOSGEB’s entire mandate, certain tax credits etc.), whereas big firms rely on general incentives (like R&D center, export incentives) and must comply with additional rules (like detailed transfer pricing documentation, etc.). But relative to many countries, even big tech firms in Turkey still enjoy extremely generous breaks (because the laws were designed to encourage any size of tech investment).

7. Impact of Recent (2024-2025) Tax Regulations and Legal Developments

The tax and legal environment in Turkey is dynamic, and several recent changes in 2024 and 2025 specifically affect game and tech companies. Below we highlight these developments and their implications for the industry:

Increased Incentives for Software Exports: At the very end of 2023, Turkey significantly enhanced the corporate tax deduction for export-based service income. Law No. 7491 (effective Jan 2024) raised the deduction under KVK 10/ğ from 50% to 80% of qualifying profits. This means if a game company provides services (like game development, software, design) to clients abroad and those services are utilized abroad, 80% of that profit is now tax-exempt (provided the earnings are repatriated to Turkey by the tax return date). For game developers, this typically covers revenue from foreign publishing deals, outsourcing contracts for foreign game companies, or even direct foreign user sales of their games if structured as service (though direct sales are goods, they achieve similar outcome via VAT law). Prior to 2024, only 50% was exempt, so this change effectively reduces the taxable portion by more than half. Combined with the exporter’s CIT rate discount, Turkish game exporters now face an ultra-low effective corporate tax rate — we calculated around 4-5% in Section 1. This boosts post-tax profits, giving companies more capital to reinvest or distribute. It’s a clear bid by Turkey to attract and retain software/gaming businesses by undercutting global tax rates.

Exporters’ Corporate Tax Rate Cut (from 1% to 5% reduction): Another boon came with Law No. 7456 in mid-2023, expanding the CIT rate reduction for exporters. Starting with Q4 2023 filings, companies that derive income from exports apply a full 5 percentage-point lower corporate tax rate on the portion of profit from exports. Initially (from 2022) it was a modest 1 point reduction, but now it’s 5 points, meaning instead of 25%, export profits are taxed at 20%. This is independent of the 80% exemption – and in fact stacks with it. For example, if only 20% of a profit remains taxable after the 80% exemption, that 20% part is taxed at 20% instead of 25%. That yields a further reduction (an extra 20% saving on that slice). In numeric terms, that turned what was effectively a ~12.5% tax (with 50% exemption) to ~4% (with 80% + rate cut). The export rate cut applies not just to tech but all exporters. However, it excludes sectors like finance and some others. Game companies definitely qualify, since their income from foreign users or publishers counts as “service export” earnings.

These two measures together have made Turkey extremely attractive tax-wise for game companies serving international markets in 2024-2025. Turkey is essentially saying: produce games here and sell globally, and keep ~96% of your profits (before min tax considerations, see below). Few countries with significant talent pools offer that low of a de facto rate.

Introduction of a 10% Minimum Corporate Tax (Effective 2025): On the flip side, Turkey is implementing a form of alternative minimum tax at the national level, dubbed “yurtiçi asgari kurumlar vergisi”. Published in late 2024 (via guidelines referencing a change under Law 7440 or related regulations), it requires that companies pay at least 10% tax on their profits regardless of incentives. Starting from 2025, for each quarterly tax period, a company will calculate its tax normally (taking into account all exemptions/deductions). If the resulting tax is less than 10% of the gross profit for that period, the company must top it up to 10%. This is aimed at companies with very high incentives (like Techno-park companies or those heavily using the 80% exemption or investment credits) to ensure they contribute a baseline amount. Important details:

• Exempt entities: Techno-park profits remain fully exempt and are not subject to minimum tax. The law explicitly states that the minimum tax doesn’t apply to profits that are already exempt under Techno-park law, among a few other exemptions. So a company entirely in Techno-park still pays 0%. However, if a company had both exempt and non-exempt profits, the exempt portion is ignored for minimum tax calculation.

• New companies grace period: Companies in their first 3 years of existence are exempt from the minimum tax rule. So startups get a pass until they are no longer “young” (the idea is not to discourage new businesses or businesses that might have big one-time incentives like an initial investment).

• Effect on R&D center/regular companies using export incentive: For a company benefiting from the 80% exemption, normally they’d pay tax on 20% of profit at 20% CIT = 4% effective. The minimum tax would make them pay 10% effective. Concretely, if profit is TRY 1m, standard tax with full incentives might come to TRY 40k, but minimum tax means they pay TRY 100k. That’s exactly the example given by the tax advisor in the Medium article: without minimum tax, 5% effective, with it, 10%. So it doubles the tax expense for those companies starting 2025.

• Techno-park vs outside: Interestingly, this creates a further incentive to stay in Techno-park, since Techno-park companies are exempt from min tax and can still effectively pay 0%. A non-Teknopark game company with only the 80% general exemption will have to pay 10%. So some companies might reconsider leaving the Techno-park or might push to get Techno-park status extended beyond 2028 because of this difference.

This minimum tax is part of Turkey aligning partially with OECD’s global minimum tax concept, but here it’s applied internally and at a lower rate (10%). The government expects extra revenue from companies that were nearly untaxed. For big profitable game companies like perhaps those with huge ad revenues or certain outsourcing firms using the 80% rule, it will increase their tax from very low to still low (10%).

Extension of Techno-park and R&D Incentives to 2028: The tax breaks for Techno-parks and R&D centers were set to expire at end of 2023 but were extended by law through 31 Dec 2028. This extension was enacted in early 2021 (Law 7263) to provide a long runway of certainty. It included all major components: corporate tax exemption, income tax withholding exemption, etc., now run until end-2028. It also extended:

• The additional “incremental R&D spend deduction” mechanism to 2028.

• The practice that companies utilizing tech zone or R&D incentives must invest a portion in startups (venture capital funds) was extended and tweaked.

• The incorporation of design activities into the incentive scheme (from 2016) was fully integrated and continued. So game design and art can also be covered, not just “hard code” R&D, as long as in a design center or Techno-park.

For game companies, this extension means the primary tax haven instrument (Techno-park) is guaranteed through 2028. Many feared a cliff at 2023; now they have at least 5 more years (and likely further extension or a new scheme by then). It allows long-term planning: e.g., a company can safely develop a 5-year plan knowing its profits from new games will not be taxed until that date.

Cap on R&D wage incentive (40x minimum wage): Already discussed in Section 5: The mid-2025 law (7555) introduced that the portion of an R&D/design employee’s salary above 40 times the minimum wage is excluded from the income tax incentive. Also, same cap for stamp duty exemption. . So practically, game companies won’t feel this. It’s more for maybe some pharma R&D or top managerial staff who had big untaxed salaries under the scheme. So while it’s a headline change, it doesn’t negatively impact the typical game firm.

Digital Service Tax (DST) and digital economy regulations: The Digital Service Tax (7.5% on certain digital revenues) has been in effect since 2020. It mostly affects big tech firms like Google, Apple, Steam – not directly local game studios (which usually don’t meet the global revenue threshold, and their core revenue isn’t from advertisement services as defined, aside from maybe some in-game ad networks). But if a Turkish game company grows huge and starts a platform service, DST could one day be relevant. As of 2024/25, DST still applies, although Turkey has signaled willingness to remove it if a global OECD solution (Pillar 1) comes into effect. For now, DST means Apple/Google likely embed that cost into their fees for Turkey. Some anecdotal evidence: App Store prices increased slightly when DST came, to cover the tax. So indirectly, game companies might see slightly lower net from Turkish user spends due to DST, but it’s not something they handle administratively (the platform does).

In 2022, Turkey introduced a new tax regime for social media content creators and e-sports players: individuals earning online content income can opt to be taxed via a simple 15% withholding by their payment platform, up to TRY 500k (then extended to 3 million TL by 2024). This was aimed at YouTubers, streamers, and indeed covers prize money or ad revenues of e-sports players and streamers. How does that affect game companies? If a game company hires streamers or works with influencers, those individuals now have a simpler tax method – not directly impacting the company’s taxes, but it smoothens the ecosystem where many game marketers rely on content creators. Also, if a game developer as an individual sells a game through an intermediary platform (like itch.io or an app marketplace) and qualifies as a “social content” earner, they might not need to set up a company to pay taxes; they can use the bank’s withholding mechanism. But most serious devs will incorporate for numerous reasons. Nonetheless, it's part of legal modernization acknowledging new digital professions.

E-commerce and Online Transactions: In mid-2023, Turkey passed regulations for online marketplaces and e-commerce (Law 7416). One provision that caught attention was the possibility of requiring withholding tax on certain online sales of individuals (to curb tax evasion on platforms). For game item trading (like selling in-game currency codes, etc.), the law clarified they are taxable activities but placed the onus on perhaps the platforms to withhold tax. That hasn’t significantly impacted game companies, but it does highlight a trend of Turkey tightening the net on digital economy participants to ensure taxes (the 15% ad withholding earlier, now potentially others).

Industry Growth and Government Focus: The game sector’s rapid growth – aiming for $1 billion revenue in 2024 according to industry reports – has drawn positive attention. The government often mentions gaming in tech development plans. For example, TÜBİTAK’s 2024 calls explicitly mention digital games under priority fields. Also, Invest in Turkey (the investment office) has been promoting Turkey as a “game development hub” in events, highlighting “zero tax + incentives” to foreign investors. There’s even mention of specialized gaming accelerators launched with public backing. All this suggests that legal changes will continue to favor the industry.

Summing up the 2024-2025 impact: The current landscape is arguably the most favorable it has ever been for Turkish game companies:

• They enjoy historically high tax exemptions and export support limits (the 80% CIT exemption, 5% CIT rate cut, and greatly increased export grant limits).

• They have certainty of these until at least 2028 (with expectations of further extension).

• New minimum tax ensures some contribution, but at 10% it remains a low bar, and some can avoid it entirely by staying in Techno-parks.

• Compliance burdens are moderate; the government has been digitalizing processes (e.g., e-invoicing, e-ledger) which companies adapt to.

• Potential future changes to watch: global tax agreements (if Turkey agrees to something like Pillar 2, though that targets multinationals with €750M+ revenue – not directly hitting local studios), any removal of DST (would slightly reduce overhead for platforms, maybe trickling down to developers eventually), or any further raise of incentives (could the 80% become 100%? Possibly not, as 80% is already high and min tax suggests 100% won’t be allowed).

• Lawmakers also periodically adjust thresholds for incentives (like raising the minimum wage multiplier cap as needed, etc.).

From a legal perspective, 2024 saw some modernization (like clarifying e-pin taxation and content creator taxes) which mostly supports a healthy ecosystem. No onerous new taxes targeted game companies specifically. If anything, the state is doubling down on backing this sector due to its high export-to-investment ratio.

Game companies should, however, maintain good documentation to substantiate their claims for R&D and export incentives (e.g., segregating local vs. export revenue in records, tracking R&D project expenses for the R&D deduction, etc.). Tax audits in Turkey pay special attention to incentive usage. For example, a company claiming 80% exemption must ensure invoices are indeed to foreign clients and those services were used abroad (the invoices and contracts need to prove that). If a company overreaches (say, tries to exempt something that doesn’t qualify), they could face clawback with interest and penalties. So prudent compliance is key to safely enjoying the generous environment.

In conclusion, as of 2025, Turkey’s updated tax regime continues to strongly favor game development activities, mitigating most standard tax costs and even sharing operational costs via grants. Legal developments like the minimum tax introduce some baseline taxation, but at a comparatively low rate that preserves Turkey’s edge. Provided companies align with the rules (and upcoming global standards), they can operate extremely tax-efficiently. This mix of incentives and recent adjustments is a central reason behind the boom and global success of Turkish game studios in the last few years. The government clearly views the game industry as a strategic export sector and is likely to maintain supportive policies moving forward.

For more information and our tax-accounting-advisory services

info@ozmconsultancy.com