Profit Tax Exemption: According to the Law on Corporate Income Tax, newly established legal entities in economically underdeveloped municipalities, engaged in manufacturing activities, are exempt from profit tax for the first eight years. The maximum amount of tax exemption for the first 8 years cannot exceed €200,000, including any amount received as state aid. However, this tax exemption does not apply to taxpayers operating in the primary production sectors of agricultural products, transportation, shipbuilding, fisheries, steel, trade, and hospitality, except for primary hospitality facilities.
Personal Income Tax Exemption: Under the Law on Personal Income Tax, individuals commencing manufacturing activities in economically underdeveloped municipalities are exempt from personal income tax for the first eight years. The total amount of tax exemption for the eight-year period cannot exceed €200,000, including any amount received as state aid. Similar to profit tax exemption, this tax relief does not apply to individuals operating in primary production sectors such as agriculture, transportation, shipbuilding, fisheries, steel, trade, and hospitality, except for primary hospitality facilities.
Payroll Tax Exemption for New Employees: Employers who hire an individual for an indefinite period or at least three years are exempt from paying the calculated and withheld payroll tax for that employee for a period of two years from the date of employment. This exemption is subject to the condition that there is a net increase in the number of employees compared to the average number of employees over the last 12 months.
Employment Incentives for Specific Categories of Unemployed Individuals: Employers can benefit from incentives when hiring certain categories of unemployed individuals, including:
- Individuals who are at least 40 years old.
- Unemployed individuals from the Roma, Ashkali, and Egyptian communities.
- Individuals registered with the Employment Agency for over five years.
- Individuals employed in public works projects.
- Individuals employed indefinitely after completing an internship.
- Individuals for whom the need for work has ceased (technical-economic surplus), registered with the Employment Agency.
- Individuals employed for seasonal work.
- Unemployed individuals with over 25 years of insurance experience who are recipients of financial benefits.
- Individuals in business zones.
Employers are exempt from paying mandatory social security contributions on behalf of the employer and personal income tax for these categories of unemployed individuals.
Incentives for Start-Up Companies: Start-up companies can benefit from tax exemptions for up to 5 years, reduced taxes and contributions up to 50% for employment in innovative activities, and 100% profit tax exemption for reinvestment in innovative projects and start-ups, in accordance with the Law on Innovation Activities and the Law on Incentive Measures for the Development of Research and Innovation.
