Türkiye’s 20-year foreign income tax exemption has entered into force after publication in the Official Gazette as Law No. 7582. The law creates a long-term exemption from Turkish tax on qualifying foreign-source income and gains for eligible new residents, while Turkish-source income remains taxable under standard rules.
Law No. 7582 is now in force
The measure was approved by Parliament in May and has now completed the legislative process through publication in the Official Gazette.
The regime applies to individuals who become Turkish tax residents from January 1, 2026. Although the law entered into force upon publication, individuals who became qualifying tax residents earlier in 2026 may also fall within its scope.
The publication moves the reform from proposal and parliamentary approval into implementation.
Who can qualify
The regime is intended for individuals who establish Turkish tax residency and were not Turkish tax residents during the previous three calendar years.
The legislation also requires that qualifying individuals did not have Turkish tax liability during that period.
This means the framework is aimed at people relocating to Türkiye after a meaningful period outside the Turkish tax system.
What income is covered
Qualifying foreign-source income and gains are exempt from Turkish taxation for 20 years.
Turkish-source income remains taxable under Türkiye’s standard tax rules.
The reform creates an exception to the general principle that Turkish tax residents are taxed on worldwide income. For eligible individuals, foreign-source income and gains are separated from income generated inside Türkiye.
Preferential inheritance tax treatment
Law No. 7582 also confirms preferential inheritance tax treatment for qualifying individuals.
A 1% inheritance tax rate applies to beneficiaries covered by the exemption regime during the exemption period.
This differs from Türkiye’s standard inheritance and transfer tax framework, which is progressive.
The provision may be relevant for internationally mobile families considering long-term succession and wealth planning.
Part of a broader reform package
The 20-year foreign income tax exemption is part of a wider package of tax and investment measures.
The same law reportedly includes:
- corporate tax reductions for manufacturing companies;
- incentives for bringing assets held abroad into Türkiye;
- extended tax advantages linked to the Istanbul Financial Centre;
- measures involving qualified service centers;
- corporate tax incentives;
- provisions designed to encourage investment and capital inflows.
What it means for investors and new residents
The publication of Law No. 7582 removes much of the uncertainty around whether the regime would become law.
For investors, entrepreneurs, and internationally mobile individuals considering relocation to Türkiye, the key feature is the 20-year exemption on qualifying foreign-source income and gains.
The timeframe is longer than many comparable European tax residency regimes.
The main practical questions now concern implementation, eligibility, residency planning, and cross-border tax obligations.
The law is now enacted, but individuals considering the regime still need to evaluate whether they meet the residency and prior-tax-status requirements, how their foreign-source income will be treated, and how the Turkish regime interacts with tax obligations in other countries.
Source article: outboundinvestment.com
