KOSGEB support: registration, application and the accounting side
Getting into the KOSGEB support system: the SME definition, registration and SME declaration through e-Devlet, types of support programme, the application and payment process, documentation, accounting for grants and common mistakes.
KOSGEB is the public body providing grants, repayable support and loan interest support to small and medium-sized enterprises. Because programmes and amounts are updated often, this article focuses on the common rules that stay the same even as programmes change.
1. Are you an SME?
To benefit from KOSGEB support, the business must meet the SME definition. The SME definition is set by a regulation updated by Presidential decree, according to the number of employees (fewer than 250) and the size of annual net sales revenue or the balance sheet. The business is classified as micro, small or medium; some programmes are open only to businesses of a certain size.
The business's activity code (NACE) must also be among the sectors KOSGEB supports: Choosing a NACE code
2. Registration
- Registration is created by logging in to the KOSGEB e-Services system through e-Devlet.
- Business details and the ownership structure are entered, and an SME declaration is made.
- The SME declaration must be updated each year with new financial data. An out-of-date declaration can lead to applications being rejected or payments being stopped.
3. Types of programme
| Programme group | For whom? | Form of support (general) |
|---|---|---|
| Entrepreneurship | Newly formed businesses; mostly subject to applied entrepreneurship training | Grants and repayable support for set-up and first-year costs |
| Business development | Active SMEs | Consultancy, training, qualified staff, certification, promotion |
| Technology and R&D | Businesses developing innovative products and processes | Project-based grants and repayable support |
| Digitalisation and productivity | Manufacturing and service businesses | Software, hardware and transformation projects |
| Exports and internationalisation | SMEs starting or increasing exports | Marketing abroad, trade fairs, certification |
| Loan interest support | Businesses meeting certain conditions | Covering part of the interest on bank loans |
Current programmes, application windows and support ceilings are announced in KOSGEB's notices; the current programme rules must always be checked before applying. To compare loan options: Loan calculator
4. Application and payment process
- Application: a project or business plan is submitted through the system according to the programme rules.
- Evaluation: the application is evaluated by the KOSGEB directorate or a board.
- Expenditure: spending is made on the approved items. In some programmes spending must be made after approval; spending made before approval may not be supported.
- Payment request: payment is requested with the invoice, payment document (bank receipt) and other required documents.
- Monitoring: on-site checks and reporting may take place during and after the project.
5. Documentation
- Invoices must be issued in the business's name and payment must be made through a bank.
- Purchases from partners or related persons may not be supported, depending on the programme rules.
- Machinery and equipment bought with support cannot be sold for a certain period or used for other purposes.
- Having no SGK or tax debt is usually a condition for payments: SGK premium debt
6. Accounting and tax
- Grants are, as a rule, income of the business; in which period and how they are recognised (directly as income or spread over the life of the related asset) depends on what the support is for.
- Repayable support is recorded as a liability.
- Depreciation and VAT deduction on assets bought with support are assessed under the normal rules.
Keeping the records correctly matters both for KOSGEB's monitoring and in a tax audit.
Common mistakes
- Not updating the SME declaration each year,
- Spending before approval,
- Paying in cash or from a partner's account,
- Not making the payment request on time,
- Selling an asset bought with support before the end of the period.
For technology-focused businesses, see also: Technopark and R&D incentives · For investment incentives: Incentives and regions
Legal basis: KOSGEB Law No. 3624; Regulation on the Definition, Qualifications and Classification of Small and Medium-Sized Enterprises; KOSGEB Support Programmes Regulation.