As part of Türkiye’s Foreign Direct Investment (FDI) Strategy (2024-2028), which serves as the official national roadmap to transform the country from a regional economic hub into a global powerhouse, Turkey has enacted one of the most far-reaching tax reform packages in its recent investment history. Law No. 7582, published in the Official Gazette dated 4 June 2026 (No. 33270) and its implementation communiqué for the 20-year exemption (Income Tax General Communiqué Series No. 333), is now in force; featuring a 20-year income tax exemption on foreign-sourced earnings and a 1% inheritance tax rate.
This regime aims to attract high-net-worth individuals, returning Turkish citizens (diaspora), foreign investors, and global entrepreneurs. Below, our team at AVK breaks down how this reshapes the legal landscape for those considering relocation, citizenship, and/or asset transfer to Turkey.
Key Benefits & Scope
⬩➤ 0% Income Tax on Foreign Wealth: Qualified individuals will pay zero Turkish income tax on overseas dividends, bank interest, rental income, capital gains (from international property or securities), and foreign employment salaries for two decades. Domestic income generated within Turkey remains subject to normal tax brackets.
⬩➤ 1% Generational Wealth Transfer: Inheritances passed down during the exemption period bypass Turkey’s standard progressive tax rates (which reach up to 10%) and are taxed at a statutory flat rate of just 1%.
⬩➤ Flexible Timeline: The 20-year window is asset-owner specific. It does not expire on a collective date but starts from the individual’s specific date of establishing residency (e.g., moving in 2027 covers you until 2047).
Eligibility Conditions
1. Three-Year Non-Residency: Applicants must not have maintained a registered domicile (ikametgah) or had active tax liabilities in Turkey during the three calendar years preceding their relocation. (Prior passive Turkish rental or securities income is not a cause to disqualify).
2. Mandatory Exemption Certificate: The benefit is not automatic. New residents must proactively apply to their local tax office to secure an Exemption Certificate for Foreign-Sourced Income.
3. Strict Deadlines: Applications must be submitted by the end of the calendar year of relocation (or by the end of the second month of the following year if arriving during November/December). Missing this window results in losing the benefit for that period.
Türkiye Qualified-service-center staff gain a salary tax exemption on wages up to three times the gross minimum wage, or five times in approved industrial zones and the Istanbul Finance Center (IFC).
⬩ IFC relief now reaches all participants, not only financial institutions, and its sunset moves from 2031 to 2047.
⬩ A 12.5% corporate tax rate covers manufacturers and agricultural producers from the 2027 tax year. Qualified service centers and transit-trade operations gain a 95% to 100% deduction on qualifying foreign earnings.
The Repatriation Pillar (Varlık Barışı)
Alongside the income exemption, Turkey has opened an existing offshore wealth amnesty window until July 31, 2027. Individuals can transfer foreign cash, gold, or securities into the Turkish banking network at tax rates scaling from 5% down to 0% (if assets are committed to a 5-year deposit or government bond lock). Filing before December 31, 2026, guarantees no rate surcharges.
Citizentship by Investment (CBI)
The exemption complements also Türkiye’s citizen by investment (CBI) program. Naturalize through the US$400,000 real estate route, relocate to become a tax resident, and the 20-year shelter on foreign income follows.
Qualification turns on one test: No Turkish domicile or tax liability in the three calendar years before becoming resident. The law then adds a carve-out: Anyone who paid Turkish tax on local rental income, securities income, or capital gains before relocating still qualifies.
FDI Program Opportunities and Benefits for Companies
Türkiye’s aim to stand out as a highly attractive and resilient destination for global direct investment offers opportunities and benefits also to companies. Driven by an aggressive economic reform agenda, the Turkish government has unified its investment frameworks to offer extensive tax, capital, and operational advantages aimed at positioning the country as a primary trade and financial hub.
The primary benefits and incentives for companies investing in Türkiye are outlined below:
1. General Investment Incentives (Core Reductions)
Companies securing an Investment Incentive Certificate (IIC) through the centralized system unlock powerful tools designed to minimize upfront capital expenditures (Capex) and lower active operation costs:
ㆍ VAT Exemption: Complete exemption from value-added tax for imported or domestically sourced machinery and equipment.
ㆍ Customs Duty Exemption: Waiver of import duties on investment-related machinery, lowering the cost of setting up assembly and production lines.
ㆍ Corporate Tax Reduction: Tax reduction rates are scaled based on the investment location and industry.
ㆍ Social Security Support: The state covers the employer’s share of social security premiums for a period ranging from 2 to 12 years depending on the project region.
ㆍ Land Allocation: Free or heavily subsidized government land allocation is made available for large industrial projects.
2. Multi-Tiered Incentive Systems
Beyond the baseline benefits, projects are classified into specialized categories providing higher thresholds of state support:
ㆍ Priority Investments: Specific high-value areas—including data centers, renewable energy components manufacturing, pharmaceutical production, and defense—automatically bypass regional limitations to receive top-tier incentives.
ㆍ Project-Based Incentives: Designed for mega-scale, critical investments (typically exceeding 2 billion TRY), these offer direct grants covering 30% to 40% of the cost, public purchase guarantees, corporate tax exemptions, and up to 49% government capital contribution support.
ㆍ HIT-30 Industrial Transformation: Focuses on over 30 advanced fields such as semiconductors, mobility, quantum computing, industrial robotics, and green energy, providing deep financing and energy subsidies.
3. Specialized Business Regimes & Export Perks
Türkiye features a highly optimized corporate tax environment for multinational corporations and trading groups:
ㆍ Exporters’ Tax Reductions: While the standard corporate tax is 25%, manufacturing exporters enjoy a reduced tax rate of 9%, and regular exporters pay 14%.
ㆍ Qualified Service Centers: Multinational groups operating across multiple countries can set up shared regional service centers in Türkiye, enjoying a massive 95% deduction on corporate tax for foreign-sourced services. If established within specialized industrial zones or the Istanbul Finance Centre, the deduction reaches 100%.
ㆍ Transit Trade Exemption: A 95% to 100% corporate tax exemption applies to earnings generated from intermediary transactions and transit trade conducted via Türkiye.
ㆍ R&D Ecosystem: Dedicated tech and R&D parks afford a 100% deduction of R&D expenses from the corporate tax base, alongside a 95% income tax exemption on personnel salaries.
4. Operational & Strategic Advantages
Investing companies also benefit from the country’s unique geographical and socio-economic position:
ㆍ Seamless Market Access: Through its Customs Union agreement with the European Union and numerous Free Trade Agreements (FTAs), Türkiye gives businesses barrier-free access to over 1 billion regional consumers.
ㆍ One-Stop Digital Investment Office: Handled by the official Presidency Investment Office, incorporation procedures, tax registration, environmental approvals, and incentive certificates are accelerated through a single, digitized administrative hub.
ㆍ Competitive & Skilled Talent: Türkiye offers a highly cost-competitive, young, and productive labor force, with roughly half the country’s population under the age of 35.
ㆍ Strategic Investment Zones: Operating within Organized Industrial Zones (OIZs) or Free Zones adds further perks, including five-year real estate tax exemptions, no VAT on land acquisition, and lower utility tariffs.
All these regulations are giving rise to consequences that should be carefully assessed. Our firm advises companies, foreign investors, financial institutions, manufacturing enterprises, technology startups, family offices, Tech-Nomads and multinational groups and individuals considering the establishment of a regional center and / or relocation in/to Türkiye.
For further information, initial confidential consultation and legal assistance, please contact AVK through following email addresses: info@avk.com.tr and/or alev@avk.com.tr
