Turkey’s parliament approved a fiscal‑incentive package that grants new residents a 20‑year exemption from Turkish income tax on foreign‑source earnings, alongside a wealth‑amnesty scheme and significant corporate‑tax reductions.
Personal income‑tax holiday
- Eligibility – Individuals who had no domicile and no Turkish tax liability for the three calendar years preceding their move to Turkey qualify.
- Scope – Foreign‑source income is excluded from Turkish tax returns for 20 years. Domestic earnings remain subject to the standard progressive rates of 15 %–40 %.
- Inheritance and gift tax – For qualifying persons the rate is reduced to a flat 1 % (the normal graduated rates range from 1 % to 30 %).
President Recep Tayyip Erdogan has 15 days to promulgate the law and publish it in the Official Gazette; a veto is not possible because the measure originated from the presidency.
Asset‑amnesty provision
- Declaration deadline – Individuals and companies must disclose foreign assets (cash, gold, foreign currency, securities) through Turkish banks or brokerage firms by 31 July 2027.
- Transfer requirement – Declared assets must be moved to Turkey within two months of the declaration.
- Tax rates on declared assets –
- 0 % if assets stay in qualifying Turkish instruments for five years
- 1 % after four years
- 2 % after three years
- 3 % after two years
- 4 % after one year
- 5 % (base rate) if withdrawn sooner
- Protection – Declared amounts are shielded from tax inspections and penalties.
Opposition parties warned that similar past amnesties have facilitated the entry of illicit funds.
Corporate‑tax changes
- Manufacturing companies – General corporate tax cut from 25 % to 12.5 %.
- Export‑related rates –
- 9 % for manufacturers exporting their own goods
- 11 % for other exporters
- Istanbul Finance Centre (IFC) –
- Companies operating within the IFC receive a full corporate‑tax exemption on transit‑trade income (previously 50 %).
- Companies outside the IFC receive 95 % relief on the same income.
- Financial‑services export income at the IFC remains fully exempt through 2047.
Context and expectations
The legislation follows a decade‑long strategy to position Istanbul, particularly the Atasehir district, as a Eurasian financial hub. Analysts anticipate that the combined personal‑tax holiday, asset‑amnesty, and corporate‑tax incentives will attract capital not only from the Gulf Cooperation Council region—where recent geopolitical tensions have disrupted financial markets—but also from North America, Europe, and the United Kingdom.
Source article: www.imidaily.com
