Turkey’s 20-Year Tax Exemption for Returning Residents: What Foreign Investors and Returning Turks Need to Know.

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), is now in force. For individuals living abroad, the headline is unmistakable: a 20-year exemption on foreign-sourced income, paired with a 1% inheritance tax. Below, our team at Oznur & Partners breaks down exactly who qualifies, what changes, and how this reshapes the legal landscape for those considering relocation, citizenship, or asset transfer to Turkey.

President Recep Tayyip Erdogan delivers the keynote address at the Turkiye Century Strong Center for Investment Program, Dolmabahce Working Office, Istanbul, 24 April 2026.

Step into the Dolmabahce Working Office on the afternoon of 24 April 2026, and you would have heard the soft hum of camera shutters give way to a single, weighted sentence. Standing before an audience of business leaders, foreign investors, and the press, the President announced what has since become one of the most consequential tax incentive packages for cross-border individuals Turkey has introduced in recent years. The room understood it immediately: this is not a minor adjustment. This is a redrawing of the map.

For families weighing a return to Istanbul, for foreign professionals considering Turkish residency, for global entrepreneurs eyeing the Bosphorus as a regional headquarters, the announcement reads like an invitation written in legal ink. Twenty years. Foreign-sourced income. Untaxed. The simplicity of the headline conceals a complex framework that any prospective resident must understand before acting.

Eleven days later, on 5 May 2026, that framework moved from announcement to legislative text. The AK Party Group Chairmanship submitted to the Grand National Assembly (TBMM) the Law Amending Certain Laws, registered under proposal number 2/3669. The bill introduced the 20-year exemption (through repeated Article 20/D of Income Tax Law No. 193), the 1% inheritance tax (amending Article 16 of the Inheritance and Gift Tax Law No. 7338), and the asset repatriation programme (through Provisional Article 19 of the Corporate Tax Law No. 5520). The Plan and Budget Committee adopted the bill on 6 May 2026; all articles were passed by the Grand National Assembly on 21 May 2026. Law No. 7582 was published in the Official Gazette dated 4 June 2026 (No. 33270) and entered into force on that date.

The Core Announcement: A 20-Year Tax Window

The President introduced the package as part of the Turkiye Century Strong Center for Investment Program. The central provision is straightforward in its statement, but layered in its application:

Individuals residing abroad who have not been Turkish tax residents in the past three years, upon relocating to Turkey, will not be taxed on foreign-sourced income or earnings for a period of 20 years. Only domestic Turkish income, where it exists, will be subject to taxation.

Layered onto this is a second, equally consequential measure: the inheritance tax (veraset yoluyla intikal vergisi) for individuals falling within this regime will be applied at a rate of 1%, a dramatic departure from Turkey’s standard progressive inheritance tax structure, which can otherwise climb to 10% on larger estates.

Repeated Article 20/D of the Income Tax Law, as enacted by Law No. 7582, frames the eligibility test as a residency and registration condition: the individual must not have had an ikametgah (registered domicile) and tax liability in Turkey during the three calendar years preceding the year in which they become deemed resident. The provision also clarifies that prior Turkish-sourced rental income, capital gains, or securities-based income does not, by itself, breach the non-residency condition. Foreign taxes paid on the exempt foreign income may not be credited against Turkish tax, and the related expenses may not be deducted against Turkish-taxable income.

Who Qualifies? The Three-Year Non-Residency Rule

The eligibility threshold is precise, and understanding it is where most strategic planning begins. The regime is targeted at three principal groups:

• Turkish citizens living abroad (the diaspora): Members of the Turkish community in Germany, the Netherlands, the United Kingdom, the United States, the Gulf, and elsewhere who have not been registered as Turkish tax residents for at least the last three calendar years.
• Foreign nationals considering Turkish residency or citizenship: Individuals from any nationality who meet the non-residency condition and choose to relocate. This dovetails directly with Turkey’s existing citizenship-by-investment program.
• Returning entrepreneurs and high-net-worth individuals: Persons whose primary income streams remain offshore, including capital gains, dividends from foreign holdings, rental income on overseas property, royalties, or pension distributions from foreign jurisdictions.

The three-year non-residency requirement is designed to prevent the regime from being used as a re-domiciliation loophole by persons who have only briefly stepped outside the Turkish tax net. It is a substantive eligibility test, and the documentation required to evidence it will be central to any application.

What Foreign-Sourced Income Actually Covers

The scope of foreign-sourced income is broader than many initial readers assume. Based on the enacted text of repeated Article 20/D and its alignment with existing Turkish tax law principles, the exemption covers:

• Employment income earned for work performed outside Turkey
• Dividends and interest from foreign companies or foreign bank accounts
• Capital gains from the sale of foreign-listed securities, foreign real estate, or stakes in foreign entities
• Rental income from properties located abroad
• Pension and retirement distributions from foreign schemes
• Royalties and intellectual property income sourced from outside Turkey

Turkish-sourced income, such as salary from a Turkish employer, profits from a Turkish-registered company, or rental income from property in Istanbul or Antalya, remains subject to ordinary Turkish income tax. The line between foreign-sourced and domestic will, in some structures, require careful legal analysis. This is the territory where pre-arrival planning matters most.

The Inheritance Tax Reduction: A Quiet Revolution

Less prominent in the headlines but arguably more transformative for estate planning is the 1% inheritance tax provision. Turkey’s standard inheritance and gift tax operates on a progressive scale, with significant tax exposure on estates passing between generations. For a family with substantial offshore wealth, the prospect of repatriating to Turkey under a 1% inheritance tax regime fundamentally alters the multi-generational calculation.

The legal anchor sits in the amendment to Article 16 of the Inheritance and Gift Tax Law (Law No. 7338), enacted by Law No. 7582: a new paragraph sets the rate at 1% for inheritance transfers occurring during the period in which the deceased was benefiting from the repeated Article 20/D exemption. The 1% figure is therefore not a discretionary administrative position but a statutory rate, integrated into the same legislative package as the 20-year exemption itself.

For our clients at Oznur & Partners’ inheritance practice, this is the kind of structural change that triggers a complete review of existing estate plans. Wills drafted under the assumption of standard Turkish inheritance taxation, trust structures established offshore precisely to avoid Turkish tax exposure, and even succession planning across multiple jurisdictions may now warrant reconsideration.

The Other Pillars of the Package: Asset Repatriation, Exporters, and Global Companies

The 20-year exemption and the 1% inheritance tax address only the individual side of the package. The corporate and capital dimensions of the same framework are equally broad:

• Asset repatriation: Cash, foreign currency, gold, securities, and other capital market instruments held abroad may be transferred into Turkey by 31 July 2027 at a tax rate that varies with the holding structure chosen. The standard rate on declaration is 5%, falling to 0% where the declared assets are committed to Turkish government debt securities, lease certificates, or term deposits for five years. Declarations filed by 31 December 2026 attract no rate surcharge.
• Corporate tax cuts for exporters: The general 25% corporate tax rate has been reduced to 9% on export earnings of manufacturer-exporters and 14% on export earnings of other exporters, effective from tax periods beginning 1 January 2026. The reduction applies only to income derived from export activity; domestic sales income remains taxed at the standard 25%.
• Istanbul Finance Center (IFM) and transit trade: Earnings from transit trade and intermediary activity in cross-border buying and selling are now 100% exempt from corporate tax within IFM. The same activities outside IFM now benefit from a 95% exemption, extending a previously IFM-exclusive incentive nationwide. The IFM service-export tax reduction has been extended to 2047.
• Regional management center incentive for global companies: Multinationals relocating their regional management headquarters to Turkey may deduct 100% of qualifying earnings within IFM, and 95% outside it, from their corporate tax base. A wage exemption has been introduced for qualified employees of these structures, subject to defined conditions.
• Single Window (Tek Durak Buro): Coordinated by the Presidential Investment and Finance Office, the new Single Window structure consolidates all investment processes, from company formation, residency and work permits, to tax and social security registration, environmental impact assessments, and incentive approvals, into a single point of contact.

Asset Repatriation Programme 2026: A Closer Look

On 25 April 2026, Treasury and Finance Minister Mehmet Şimşek convened a follow-up briefing at the Presidential Complex to detail the asset repatriation dimension of the package. Framed under the heading “Bring It Home” (Eve Getir), this provision addresses not future income but existing wealth held abroad. For a more detailed Turkish-language guide on the same provision, see our Varlık Barışı 2026 article.

The mechanism is straightforward in its premise. Cash, foreign currency, gold, securities, and other capital market instruments held outside Turkey, together with assets held domestically but outside the formal financial system, may be brought into the Turkish financial system through a declaration and transfer process. The legal basis is Provisional Article 19 of the Corporate Tax Law (Law No. 5520), as enacted by Law No. 7582.

The standard rate, applied where the declared assets are placed into ordinary bank accounts or brokerage accounts, is 5%. Where the investor commits the assets to Turkish government debt securities (DİBS), lease certificates issued under Law No. 4749, or term deposits, the rate falls on a sliding scale tied to the length of the holding commitment.

Rate matrix under Provisional Article 19, paragraph 6:

Declaration and Holding Structure	Tax Rate
Standard declaration (immediate disposition)	5%
Term deposit / DİBS / lease certificate — 1-year holding commitment	4%
Term deposit / DİBS / lease certificate — 2-year holding commitment	3%
Term deposit / DİBS / lease certificate — 3-year holding commitment	2%
Term deposit / DİBS / lease certificate — 4-year holding commitment	1%
Term deposit / DİBS / lease certificate — 5-year holding commitment	0%

Declaration timing and rate surcharges:

Declaration Window	Rate Effect
4 June 2026 (entry into force) – 31 December 2026	Matrix rates apply without surcharge
1 January 2027 – 31 July 2027 (inclusive)	Matrix rates plus 0.5 percentage point
After 31 July 2027, if deadline extended by Presidential decree	Matrix rates plus 1.0 percentage point total

The bank or brokerage receiving the declaration withholds the tax at source and remits it, as the legally responsible party, by the fifteenth day of the month following the declaration.

What sets the 2026 programme apart from prior asset declaration regimes in Turkey is the breadth of its legal protections. Paragraph 8 of Provisional Article 19 is explicit on three points:

• No source-of-funds inquiry: The origin of declared assets will not be questioned by the tax authorities.
• No retroactive tax assessment: No tax inspection or assessment will be conducted in respect of the declared amounts.
• Matrix protection in ongoing inspections: Where a separately initiated tax inspection identifies an unreported tax base, and the investigator concludes that the unreported base arises from the same assets covered by the declaration, no assessment is made if the declared amount equals or exceeds the identified shortfall. Where the shortfall exceeds the declared amount, assessment is made only on the difference.

These protections are subject to the boundaries of Turkey’s anti-money laundering framework. The same paragraph 8 carries a textual safeguard: “measures required under other legislation are not affected by this provision.” Assets connected to predicate offences under the MASAK regime, including proceeds of crime, terrorist financing, and other categories of illicit funds, remain outside the scope of the programme’s protections. Bank suspicious-transaction reporting obligations continue to operate independently of the declaration.

A further structural condition deserves attention. Paragraph 2 of Provisional Article 19 imposes a strict transfer window: assets declared from abroad must be transferred to a Turkish bank or brokerage account, or physically brought into Turkey, within two months of the declaration date. Failure to meet this deadline triggers paragraph 9: the investor loses the protection against tax inspection, and the unaccrued taxes are collected together with default interest, although without the standard tax loss penalty. Domestic-asset declarations operate on an even tighter timeline: the assets must be deposited with a Turkish bank or brokerage on the declaration date itself.

For taxpayers maintaining statutory accounting books (essentially companies and self-employed professionals), paragraph 4 introduces a two-year capital lock. Declared assets are recorded in the books, and balance-sheet taxpayers open a special fund account in the liabilities. This fund cannot be withdrawn from the business for two years from the declaration date and cannot be used for any purpose other than capital injection during that period. After two years, it may be withdrawn without affecting taxable income. Paragraph 5 carves out an important exception: individuals who are not income-tax or corporate-tax registered (the typical profile of a non-resident diaspora investor) are exempt from this two-year capital lock, provided they meet the transfer and deposit conditions of paragraph 2.

The strategic value of the programme emerges most clearly when read together with the 20-year exemption. The repatriation programme addresses the question of existing wealth: how to bring foreign assets into Turkey at a low effective tax cost and with legal certainty over their historical position. The 20-year exemption then addresses the question of future income: ensuring that, once relocated, the individual’s foreign-sourced earnings remain outside Turkish tax for two decades. A family considering relocation can repatriate accumulated wealth at a rate of 0% to 5% depending on holding structure, settle their fiscal position in Turkey under the 20-year regime, and ultimately transfer that wealth to the next generation under the 1% inheritance tax. Few jurisdictions offer this combination in a single legislative window.

Several legal considerations deserve close attention before any declaration. Source-country tax obligations remain in force regardless of Turkish protections, and exit taxation in Germany (Wegzugsbesteuerung), the remittance basis position in the United Kingdom, and similar regimes in other source jurisdictions must be analysed in parallel. Bank compliance procedures in Turkey will still require documentation consistent with international banking standards. The choice of corporate or personal vehicle for receiving the assets affects the long-term tax and succession profile, and engages the two-year capital lock for company-route declarations. None of these considerations diminish the programme’s value, but each underscores the importance of structured legal preparation before, rather than after, the declaration is filed.

Legal Status of the Reform: Enacted and In Force

Law No. 7582 completed its full legislative passage and entered into force on 4 June 2026. The timeline: announced on 24 April 2026 by the President and detailed on 25 April by the Minister of Treasury and Finance, the legislative text was submitted to the Grand National Assembly on 5 May 2026 under proposal number 2/3669 (Legislative Period 28, Legislative Year 4). The Plan and Budget Committee adopted the bill on 6 May 2026. All articles were passed by the Grand National Assembly on 21 May 2026. Law No. 7582 was published in the Official Gazette dated 4 June 2026 (No. 33270) and entered into force on that date. The bill text and procedural record remain accessible on the TBMM website.

Key effective dates under the enacted law:

• 20-year foreign income exemption (repeated Article 20/D): Takes effect for individuals deemed resident in Turkey from 1 January 2026 onward, applied from the date of publication (4 June 2026), enabling retroactive application for those who relocated earlier in 2026.
• Asset repatriation (Provisional Article 19): In force from 4 June 2026. Declaration deadline: 31 July 2027. Declarations filed by 31 December 2026 attract no rate surcharge.
• Exporter corporate tax reductions: Applicable from tax returns due from 1 July 2026 onward, for tax periods beginning 1 January 2026.
• IFM service-export reduction extension to 2047: In force from 4 June 2026.

Implementation communiqués from the Ministry of Treasury and Finance will follow, addressing the procedural mechanics of the 20-year exemption application, required documentation, and the mechanics of the declaration process. The Ministry has been granted authority under the enacted law to determine these details. For those who have already relocated to Turkey in 2026, the retroactive application means that the exemption period may run from 1 January 2026 regardless of the enactment date; professional advice on evidencing this position is advisable now, not later.

Strategic Implications for Foreign Investors and Returning Citizens

For our international clientele, the implications cluster around several decision points. A French entrepreneur with a holding company in Luxembourg, considering Turkish residency for lifestyle reasons, now confronts a materially different tax calculus than they did before this package. A Turkish-American family in New York, where the parents have not been Turkish tax residents in over a decade, can now contemplate generational wealth transfer to Turkey under a 1% inheritance regime. A British investor weighing whether to combine the citizenship-by-investment route with relocation now has a 20-year tax horizon that outperforms several competing residency programs in the Mediterranean and the Gulf.

None of these decisions, however, should be made without legal review. Tax residency is determined not only by intention but by the practical reality of where one lives, works, and maintains economic ties. Double tax treaties between Turkey and the prospective applicant’s home jurisdiction will continue to apply. And the interaction between this new regime and existing Turkish tax law, including the asset declaration regime, the capital gains rules, and the controlled foreign company provisions, requires careful integration.

How Oznur & Partners Can Help

Our firm advises foreign nationals, Turkish citizens abroad, and international families on the full spectrum of legal questions surrounding relocation to Turkey. Whether your considerations begin with Turkish citizenship by investment, the immigration and residency permit framework, the structuring of inheritance and succession across multiple jurisdictions, or the corporate vehicles and company formation that may sit alongside personal relocation, our team can help you evaluate this legislation against your specific position.

Law No. 7582 is in force. The declaration window for asset repatriation is open. The 20-year exemption is available to those who qualify. For anyone who has already relocated to Turkey in 2026, the retroactive application means time matters. The most valuable next step is a structured legal assessment of your position before the Ministry’s implementation communiqués set the procedural clock running.

Frequently Asked Questions

What is Turkey’s new 20-year tax exemption?

Turkey’s 20-year tax exemption removes Turkish income tax on foreign-sourced income and earnings for individuals who relocate to Turkey, provided they have not been Turkish tax residents in the past three calendar years. Only domestic Turkish income remains taxable. Enacted as repeated Article 20/D of Income Tax Law No. 193 by Law No. 7582, published in the Official Gazette dated 4 June 2026 (No. 33270), the exemption takes effect for individuals deemed resident in Turkey from 1 January 2026 onward.

Who qualifies for the 20-year tax exemption in Turkey?

Eligibility requires that the individual has not had a registered domicile (ikametgah) in Turkey, and has not been subject to Turkish tax liability, during the three calendar years immediately preceding the year of relocation. This applies to Turkish citizens living abroad, foreign nationals seeking residency or Turkish citizenship, and returning entrepreneurs whose income streams are predominantly foreign-sourced. Documentation evidencing non-residency during the qualifying period will be central to the application process. Prior Turkish-sourced rental income, capital gains, or securities-based income does not, by itself, breach the non-residency condition under the enacted law.

What types of income are covered by the 20-year foreign income exemption?

The exemption covers foreign-sourced employment income, dividends and interest from foreign accounts and companies, capital gains from foreign securities and real estate, rental income from properties abroad, foreign pension distributions, and foreign royalty income. Turkish-sourced income, including salary from Turkish employers, profits from Turkish companies, and rental income from Turkish property, remains subject to ordinary Turkish income tax. Foreign taxes paid on the exempt foreign income may not be credited against Turkish tax, and related expenses may not be deducted against Turkish-taxable income.

How does the 1% inheritance tax work under the new package?

Individuals who qualify for the 20-year regime are subject to inheritance and gift tax (veraset yoluyla intikal vergisi) at a flat rate of 1%, rather than Turkey’s standard progressive inheritance tax that can reach 10%. The legal anchor sits in the amendment to Article 16 of the Inheritance and Gift Tax Law (Law No. 7338), enacted by Law No. 7582, which sets the 1% rate for inheritance transfers occurring during the period in which the deceased was benefiting from the repeated Article 20/D exemption. This significantly reduces the tax cost of multi-generational wealth transfer for families relocating to Turkey under this regime.

What is the actual tax rate under the asset repatriation programme?

The standard rate is 5%, applied where the declared assets are placed into ordinary bank or brokerage accounts. Where the investor commits the assets to Turkish government debt securities (DİBS), lease certificates issued under Law No. 4749, or term deposits, the rate falls on a sliding scale: 4% for a one-year holding commitment, 3% for two years, 2% for three years, 1% for four years, and 0% for five years. Declarations filed between 1 January 2027 and 31 July 2027 attract a 0.5 percentage point surcharge; declarations filed by 31 December 2026 attract no surcharge. The rate is a function of the holding structure chosen at declaration, not simply of timing.

What is the two-month transfer rule and why does it matter?

Under paragraph 2 of Provisional Article 19, assets declared from abroad must be transferred to a Turkish bank or brokerage account, or physically brought into Turkey, within two months of the declaration date. Failure to meet this deadline triggers paragraph 9: the investor loses the protection against tax inspection that would otherwise apply, and the unaccrued taxes are collected together with default interest, though without the standard tax loss penalty. Banking arrangements, KYC documentation, and where applicable a Turkish corporate vehicle should be in place before the declaration is filed, not after.

How does the corporate tax change for exporters?

Law No. 7582 reduced the general 25% corporate tax rate to 9% on export earnings of manufacturer-exporters and 14% on export earnings of other exporters, applicable from tax returns due from 1 July 2026 for tax periods beginning 1 January 2026. The reduction applies only to income derived from export activity; domestic sales income remains taxed at the standard 25%. This is a separate incentive from the individual 20-year exemption.

What is the Single Window, and how does it affect foreign investors?

The Single Window is a new investor service structure coordinated by the Presidential Investment and Finance Office. Company formation, residency and work permits, tax and social security registration, environmental impact assessments, and incentive approvals are processed from a single point of contact. For foreign investors, this means shorter procedural timelines and greater predictability, although competent legal representation remains essential to ensure applications are correctly prepared.

Is the 20-year tax exemption already in force in Turkey?

Yes. Law No. 7582 was published in the Official Gazette dated 4 June 2026 (No. 33270) and entered into force on that date. The 20-year exemption under repeated Article 20/D takes effect for individuals deemed resident in Turkey from 1 January 2026 onward, enabling retroactive application for those who relocated earlier in 2026. Implementation communiqués from the Ministry of Treasury and Finance will follow, clarifying the procedural mechanics of the application process.

Can foreign investors combine the 20-year exemption with Turkish citizenship by investment?

The two regimes are structurally complementary. Citizenship by investment grants Turkish nationality based on qualifying real estate, capital, or deposit investments, while the 20-year exemption operates on tax residency criteria. A foreign investor who acquires Turkish citizenship and subsequently establishes Turkish tax residency, having not been a Turkish tax resident in the prior three calendar years, is in principle able to access both regimes. Legal review is essential to confirm eligibility based on individual circumstances.

Where can I find the legal text of the new package?

Law No. 7582, titled Bazı Kanunlarda Değişiklik Yapılmasına Dair Kanun, was published in the Official Gazette dated 4 June 2026 (No. 33270). The legislative history is publicly accessible on the official TBMM page under proposal number 2/3669. The 20-year exemption is enacted through repeated Article 20/D of Income Tax Law No. 193; the 1% inheritance tax rate through amendment to Article 16 of Inheritance and Gift Tax Law No. 7338; and the asset repatriation programme through Provisional Article 19 of Corporate Tax Law No. 5520.

What should I do now if I am considering relocating to Turkey?

The law is in force and the declaration window is open. Priority steps include confirming and evidencing your non-resident status for the past three calendar years, reviewing the structure of your foreign-held assets, examining existing wills and estate plans against the new 1% inheritance regime, assessing how double tax treaties between Turkey and your home jurisdiction will apply, and preparing the banking and corporate infrastructure required for any declaration. For those who relocated to Turkey earlier in 2026, establishing the retroactive application of the exemption from 1 January 2026 requires immediate attention, ahead of the Ministry’s implementation communiqués.

How does Turkey’s 20-year tax exemption compare to other residency tax regimes?

Turkey’s regime is among the longest-duration foreign income exemptions globally. Italy’s flat tax regime for new residents runs for up to 15 years, Greece’s non-dom regime runs for 15 years, and Portugal’s former NHR regime ran for 10 years. The 20-year horizon, combined with the 1% inheritance tax, the parallel asset repatriation programme, and Turkey’s strategic geographic position, positions the regime as competitive at the upper end of the European and Mediterranean residency-based tax planning landscape.

This article is prepared by the legal team at Oznur & Partners, an Istanbul-based law firm advising international clients on tax, immigration, citizenship, corporate, and inheritance matters in Turkey. The content is provided for general informational purposes and does not constitute legal advice. Law No. 7582 was published in the Official Gazette dated 4 June 2026 (No. 33270) and is now in force; final procedural mechanics will be determined upon publication of implementation communiqués by the Ministry of Treasury and Finance.

Sources: President’s address at the Turkiye Century Strong Center for Investment Program, Dolmabahce Working Office, 24 April 2026; Minister of Treasury and Finance briefing, Presidential Complex, 25 April 2026; Law No. 7582 (Bazı Kanunlarda Değişiklik Yapılmasına Dair Kanun), submitted to the Grand National Assembly on 5 May 2026 under proposal number 2/3669, adopted by the Plan and Budget Committee on 6 May 2026, passed by the Grand National Assembly on 21 May 2026, published in the Official Gazette dated 4 June 2026 (No. 33270) (official TBMM record); reporting by Anadolu Agency, Sozcu, TRT Haber, and the Presidential Communications Directorate.