Turkey’s 20-Year Tax Exemption: What International Investors Need to Know
On June 4, 2026, Turkey published Law No. 7582 in the Official Gazette. The law introduces significant changes across several areas of Turkish tax and investment legislation. While the law covers a broad range of topics, five of its provisions stand out as particularly relevant for international investors.
In this article, I will examine each of these five changes, explain what the law says, and discuss what they may mean for individuals and businesses considering Turkey as an investment or relocation destination.
- Overseas Asset Declaration Program
- 20-Year Foreign Income Tax Exemption
- Reduced Inheritance Tax Rate
- Qualified Service Centers
- Corporate Tax Advantages
1. Overseas Asset Declaration Program
What Does the Law Say?
Individuals and legal entities may declare overseas assets — including cash, gold, foreign currency, securities, and other capital market instruments — to Turkish banks or intermediary institutions until July 31, 2027.
Once declared, these assets must be transferred to accounts held at Turkish banks or intermediary institutions within two months of filing the declaration. Assets physically brought into Turkey must be deposited into these accounts and documented through a customs declaration.
Declared assets are subject to a base tax rate of 5%. However, this rate can be reduced significantly depending on how long the investor commits to keeping the assets in eligible accounts or instruments:
- 5 years or more: 0%
- 4 years: 1%
- 3 years: 2%
- 2 years: 3%
- 1 year: 4%
The law also provides an important protection: declared assets will not be subject to tax investigation or additional tax assessment. However, the law explicitly states that other applicable regulations — such as anti-money laundering rules and banking compliance requirements — continue to apply.
What Does This Mean for International Investors?
This framework may be relevant for individuals and companies that hold assets outside Turkey and are considering bringing them into the Turkish financial system. Whether the goal is to restructure existing holdings, explore new investment opportunities, or simply establish a cleaner legal structure for overseas assets, this program offers a defined legal pathway with a predictable tax cost. Once declared, those assets cannot later become the subject of a tax audit or reassessment in Turkey — though other applicable regulations, including banking and compliance requirements, continue to apply. For investors who value certainty and legal clarity, this is a meaningful guarantee.
It is important to note that this program does not override all legal obligations. Compliance with banking regulations, anti-money laundering requirements, and other applicable laws remains mandatory regardless of participation in this program.
2. 20-Year Foreign Income Tax Exemption
What Does the Law Say?
The law introduces a new provision into the Turkish Income Tax Law. Under this provision, individuals who become tax residents in Turkey are exempt from Turkish income tax on income earned outside Turkey for a period of 20 years, provided they meet the following conditions:
- They were not resident in Turkey during the three calendar years immediately preceding their relocation.
- They did not have tax obligations in Turkey during that same period.
The exemption covers all income and earnings generated outside Turkey. Income covered by this exemption does not need to be declared in an annual tax return, and even if the individual files a return for other income, the exempt foreign income is not included.
The law also specifies that taxes paid abroad on this income cannot be offset against Turkish income tax. If it is later determined that the conditions for the exemption were not met, any unpaid taxes will be treated as a tax loss.
What Does This Mean for International Investors?
For individuals who are considering relocating to Turkey, this provision may represent one of the most significant tax advantages introduced in recent years. If you earn income from sources outside Turkey and meet the eligibility conditions, that income may be fully exempt from Turkish income tax for 20 years. This is not a small or temporary incentive. A 20-year exemption period provides long-term predictability, which is particularly valuable for high-net-worth individuals and families planning their financial future.
3. Reduced Inheritance Tax Rate
What Does the Law Say?
The law introduces a reduced inheritance tax rate of 1% for individuals who qualify for the 20-year foreign income tax exemption. This reduced rate applies to inheritance transfers that occur during the period in which the individual is benefiting from the income tax exemption.
What Does This Mean for International Investors?
Turkey’s standard inheritance tax rates are progressive and can reach significant levels depending on the value of the estate. For individuals who qualify for the 20-year income tax exemption, the law now also offers a substantially reduced inheritance tax rate of 1% during that same period. For families with significant assets who are planning long-term wealth transfer, this combination — a 20-year income tax exemption paired with a 1% inheritance tax rate — may make Turkey a genuinely competitive option for wealth and succession planning.
4. Qualified Service Centers
What Does the Law Say?
The law introduces a new legal concept into Turkish law: the Qualified Service Center. A Qualified Service Center is defined as a company that:
- Is actively operating in at least three different countries,
- Is established to provide services to a related company or group of companies,
- Generates at least 80% of its annual revenue from related companies or groups located outside Turkey.
Qualified Service Centers may provide a wide range of services, including financial advisory, strategic management, risk management, technology consulting, legal coordination, human resources, and brand management, among others.
What Does This Mean for International Investors?
For international business groups that operate across multiple countries, this framework creates a new option: establishing a Qualified Service Center in Turkey to manage group-wide functions — including finance, technology, and strategic management — from a single location. Turkey’s geographic position, its growing financial infrastructure, and now this legal framework may make it an attractive base for regional or global operations.
5. Corporate Tax Advantages
What Does the Law Say?
The law introduces two significant corporate tax deductions:
For trading companies: Companies that purchase goods abroad and sell them abroad without bringing them into Turkey — or that act as intermediaries in such transactions — may deduct 95% of the profits from these activities from their corporate tax base. For companies operating in eligible industrial zones or within the Istanbul Finance Center, this rate rises to 100%.
For Qualified Service Centers: Companies operating as Qualified Service Centers may deduct 95% of the income they earn from abroad from their corporate tax base. This rises to 100% for those in the Istanbul Finance Center or eligible industrial zones. This deduction applies for a period of 20 accounting periods from the date the Qualified Service Center begins operations.
Additionally, the law introduces a reduced corporate tax rate of 12.5% for companies holding an industrial registry certificate that are genuinely engaged in manufacturing activities. This rate applies from the 2027 tax year onward.
What Does This Mean for International Investors?
These provisions significantly reduce the effective tax burden for companies that operate internationally through Turkey. A 95% deduction on qualifying foreign-sourced income — rising to 100% in certain locations — means that the effective corporate tax rate on such income is minimal. Combined with the Qualified Service Center framework, this creates an attractive structure for international business groups looking to establish or consolidate operations in Turkey.
Conclusion
Law No. 7582 represents a meaningful shift in Turkey’s approach to attracting international capital and talent. Taken together, these five provisions create a framework that may be relevant not only for investors purchasing property or applying for Turkish citizenship, but also for individuals relocating to Turkey, families planning long-term wealth transfer, and international companies looking to establish regional operations.
As with any significant legal development, the full impact of these changes will become clearer as secondary regulations are published and implementation begins. Some provisions — particularly the 20-year income tax exemption — are broad in their current form, and the details will be shaped by future ministerial guidance.
If you are considering whether any of these provisions may apply to your situation, I would encourage you to seek qualified legal advice before taking any steps.
This article is intended for informational purposes only and does not constitute legal advice. The provisions described are based on Law No. 7582 as published in the Official Gazette on June 4, 2026. Individual circumstances vary, and you should consult a qualified lawyer before making any decisions based on this information.
This article covers five key provisions of the Law selected for their relevance to international investors. Additional changes introduced by the Law may also be of interest — the full text is available at the Official Gazette link below
https://www.resmigazete.gov.tr/eskiler/2026/06/20260604-1.htm