Turkey’s 20 Year Tax Exemption Is Now Law: What Investors Need to Know

Turkey has officially enacted one of the most significant tax incentive packages in its recent history.

The newly published legislation introduces:

• a 20-year income tax exemption for qualifying foreign-source income,
• a renewed asset repatriation framework (“Asset Peace” / Varlık Barışı),
• and a reduced-rate system that may lower the applicable asset repatriation charge from 5% to as low as 0% in certain situations.

For international entrepreneurs, investors, business owners, and globally mobile individuals, the new framework may create substantial opportunities for relocation, investment, and long-term tax planning.

Why Is This Important?

Many countries compete to attract:

• entrepreneurs,
• investors,
• high-net-worth individuals,
• internationally mobile professionals,
• and foreign capital.

Turkey has now introduced a framework that may significantly increase its attractiveness for individuals earning income outside Turkey while considering relocation, investment, or business expansion.

The legislation combines three powerful elements: foreign income tax relief, asset repatriation opportunities and Turkish residence and citizenship pathways.

The New 20-Year Foreign Income Tax Exemption

Under the new law, individuals who become Turkish tax residents may benefit from a 20-year exemption on qualifying foreign-source income and gains, provided certain statutory conditions are satisfied.

One of the most important requirements is that the individual must not have been resident in Turkey or subject to Turkish tax liability during the previous three calendar years before relocating to Turkey.

According to the published framework, qualifying foreign-source income generally does not need to be included in annual Turkish income tax returns during the exemption period.

This may create significant planning opportunities for individuals who receive income from abroad.

Examples may include:

• foreign business income,
• foreign dividends,
• foreign investment income,
• foreign rental income,
• certain foreign capital gains.

The exact scope of qualifying income should always be evaluated based on the individual’s circumstances.

Does Turkey Stop Taxing All Income?

No.

This is one of the most important points investors should understand.

The exemption generally applies to qualifying foreign-source income.

Income generated within Turkey remains subject to the ordinary Turkish tax system.

In simple terms:

Turkey is not eliminating income taxes.

Rather, it is creating a highly attractive regime for individuals relocating to Turkey while earning income abroad.

Turkey’s New Asset Repatriation Framework (Varlık Barışı)

The legislation also extends Turkey’s asset repatriation regime until 31 July 2027.

The framework generally allows certain foreign assets to be declared and brought into Turkey under favorable conditions.

The regime covers assets such as:

• cash,
• foreign currency,
• gold,
• securities,
• and other capital market instruments held abroad.

For many investors, this may provide an opportunity to regularize foreign assets while establishing a financial presence in Turkey.

Asset Repatriation Rates: From 5% Down to 0%

One of the most notable features of the new framework is the introduction of a graduated rate system.

The standard rate is generally 5% of the declared asset value.

However, depending on the investor’s commitments and the manner in which assets are retained or invested within Turkey, the applicable rate may be reduced progressively.

The legislation contemplates rates that may decrease from:

• 5%
• 4%
• 3%
• 2%
• 1%
• and potentially 0%

where the relevant statutory conditions are satisfied.

This means that investors willing to maintain assets within the Turkish financial system or allocate them to qualifying investments may benefit from substantially reduced rates.

What Makes This Different?

Historically, asset repatriation programs have often focused only on bringing capital into the country.

The new framework goes further.

Investors may now evaluate:

• relocating to Turkey,
• bringing foreign assets into Turkey,
• establishing Turkish companies,
• investing in Turkish businesses,
• acquiring real estate,
• obtaining Turkish citizenship,
• and potentially benefiting from foreign-income tax relief.

For certain investors, these measures may work together as part of a broader long-term strategy.

Turkey continues to offer citizenship opportunities through qualifying investments.

One of the most popular routes remains real estate investment.

Currently, qualifying real estate investments meeting the applicable legal threshold may provide a pathway to Turkish citizenship.

You may also read our guide on Turkish Citizenship by Investment Through Real Estate to learn more about the requirements and investment process.

Frequently Asked Questions

Who can benefit from the 20-year tax exemption?

Individuals who become Turkish tax residents and satisfy the statutory eligibility requirements, including the three-year non-residency condition.

Does the exemption apply to Turkish income?

No. Turkish-source income generally remains subject to ordinary Turkish taxation.

Until when can foreign assets be declared?

The current framework generally permits declarations until 31 July 2027.

Is there a minimum amount required?

The legislation is generally discussed without a specific minimum threshold, although compliance requirements remain important.

Can asset repatriation rates really fall to 0%?

The legislation introduces a reduced-rate system that may lower the applicable rate depending on the investor’s commitments and compliance with the relevant conditions.

Legal Support for International Investors

Gozkaya Legal advises foreign investors, entrepreneurs, business owners, and internationally mobile individuals regarding:

• company formation,
• cross-border business structures,
• real estate investments,
• Turkish citizenship matters,
• residence planning,
• and international legal operations involving Turkey.

For further guidance regarding Turkey’s new 20-year foreign income tax exemption or the new asset repatriation framework, please contact us directly.