🇹🇷Turkey: 20 Years Tax-Free on Foreign Income for New Residents

Concept

Turkey has adopted one of the world's longest personal "new resident tax exemption on foreign income" regimes (non-dom regime): a new resident who has not been a Turkish tax resident and has not had Turkish tax registration for the three preceding calendar years may exclude foreign income from the Turkish income tax base for 20 years.

This is not an abolition of Turkish tax altogether. The regime applies only to income that qualifies as sourced outside Turkey. Turkish-source income, Turkish salary, income from Turkish real estate, Turkish business, and permanent establishment continue to be taxed under ordinary rules.

What Exactly the Law Changes

A new article is being added to the Turkish Income Tax Law No. 193 (Gelir Vergisi Kanunu, GVK) as duplicate Article 20/D (Mükerrer Madde 20/D): "Tax exemption for income and revenues obtained from abroad" (Yurt dışından elde edilen kazanç ve iratlar için vergi istisnası). Essentially, this is an exemption for foreign income and revenues of individuals who become residents of Turkey.

Key elements:

• term: 20 years;
• entry condition: no Turkish domicile and no Turkish tax registration for the last 3 calendar years before relocation;
• subject of exemption: income and revenues obtained outside Turkey;
• declaration: no annual declaration is filed for exempt income, and if a declaration is filed for other income, exempt income is not included;
• expenses: expenses and cost base related to exempt income do not reduce the Turkish tax base for other income;
• foreign tax: tax paid abroad on exempt income is not credited against Turkish income tax;
• if the regime conditions are later not confirmed, unassessed tax is deemed budget shortfall and is collected.

Important technical caveat: if before entering the regime a person already had limited tax registration in Turkey due to Turkish rental income, movable capital income, or capital gains, this alone does not block the regime. This is useful for investors who already had Turkish assets before relocation.

Procedure and Timeline: What Happens Next Under the Law

The professional view is not "waiting for publication," but understanding where the law is in the cycle and what will happen next.

1. Promulgation (presidential signature and publication). This step is done. Under Article 89 of the Constitution, the president had 15 days from adoption either to publish the law in the Official Gazette (Resmi Gazete) or to return it to parliament (TBMM) with justification. The law was published on June 4, 2026 in Resmi Gazete No. 33270.
2. Entry into force. The 20-year regime provision applies to persons who became residents from January 1, 2026, and legally takes effect from the date of publication — June 4, 2026. That is, the law retrospectively covers those who became residents in 2026—important for those who have already relocated.
3. Secondary legislation. For implementation, the Ministry of Treasury and Finance (Hazine ve Maliye Bakanlığı) and the tax authority (Revenue Administration, Gelir İdaresi Başkanlığı) will issue a general explanatory circular (Genel Tebliğ) with forms, declaration procedures, and interpretation of disputed points—primarily the definition of source of income for salary and services. The status of the circular and its annexes (including forms) should be checked as of the filing date; specific parameters may be clarified by presidential decree (Cumhurbaşkanı Kararı).
4. What to do now. Without waiting for the circular: fix the date of Turkish residency, verify the "clean" three preceding years, conduct source-of-income analysis for each type of revenue, assess controlled foreign company (CFC) and exit tax risks in the departure country, prepare banking compliance. Premature Turkish tax attachment can close entry, so steps must be sequenced correctly.

Who Can Enter the Regime

The regime is addressed to individuals who become tax residents of Turkey. As a general rule, Turkey considers residents to be persons with a permanent place of residence in Turkey, persons with the intention to settle in the country, and foreigners who stay in Turkey for more than six months in a calendar year. Non-residents are usually taxed only on Turkish-source income.

Practically, the regime suits not "a tourist with a bank card," but a person who genuinely enters the Turkish tax orbit: relocation, residence permit, housing, center of life, or extended stay. Under the general rule (Income Tax Law, GVK, Article 4), a tax resident is one whose center of life is in Turkey or who has spent more than six months—practically more than 183 days—in the country during a calendar year. Key nuance: mere possession of a residence permit or even a Turkish passport does not equal tax residency, and without residency the regime makes no sense. How residence permit and citizenship routes work and how they interface with this regime is covered in a separate article: Turkey Residence Permit and Citizenship 2026.

Which Income Appears Most Natural for Exemption

Until subordinate regulations appear, the cautious position is: it is safest to discuss income whose source is clearly outside Turkey.

Typical categories:

• dividends from foreign companies;
• interest on foreign accounts, loans, and bonds;
• capital gains from foreign securities;
• rental income from real estate outside Turkey;
• profit from the sale of foreign real estate;
• distributions from foreign trusts, funds, or portfolio structures, if properly qualified;
• income from business outside Turkey, if it has no permanent establishment (PE) in Turkey and no Turkish source.

The most sensitive zone is salary and service income. If a person lives in Turkey and performs work from Turkey, a foreign employer or foreign client alone may not be enough for the income to be automatically considered foreign-source income. For remote founders, consultants, and developers, separate source-of-income analysis is needed.

What Is Not Exempt

The regime should not be perceived as "personal tax invisibility." Outside the exemption remain:

• income from Turkish sources;
• income from Turkish real estate;
• salary for work whose source is recognized as Turkish;
• business through a Turkish permanent establishment;
• Turkish dividends, interest, and capital gains;
• taxes in other countries, including controlled foreign companies (CFC), exit tax, remittance-based taxation rules, citizenship-based taxation, and treaty residency.

Standard income tax rates in Turkey are progressive: 15%, 20%, 27%, 35%, and 40%. The new regime does not change these rates for income that did not fall within the exemption.

Inheritance: 1% Rate

The law also changes the logic of inheritance and gift tax for persons using the 20/D regime. For inheritance transfer of property during the exemption period, the rate should be applied as 1%.

This is not just a pleasant bonus. For high-net-worth individuals (HNWI) and family structures, this changes the calculation: Turkey is trying to compete not only for current income but also for long-term placement of family, portfolio, and estate planning.

Context: Package No. 7582

The 20-year regime is only part of the large package No. 7582 aimed at attracting capital and companies. According to a PwC Türkiye review, the same law includes:

• 20-year exemption of foreign income for new residents and a 1% inheritance rate for them;
• a new capital amnesty (Varlık Barışı);
• reduced corporate tax rate for manufacturing companies;
• incentives for "qualified service centers" and expansion of Istanbul Financial Center (İstanbul Finans Merkezi, IFC) benefits, including extension of the 100% deduction for export of financial services until 2047;
• expansion of transit trade benefits;
• easing of tax on stock options for tech startups with reduction of the full exemption period to 6 years;
• increase of the maximum term for tax debt installment from 36 to 72 months.

For private clients, the first two or three elements remain key, but the overall logic is important: Turkey is building a "resident → capital → companies" linkage.

Comparison with Other Non-Dom Regimes

This is a tax regime, so it is correct to compare it with other tax regimes, not with migration routes (digital nomad visa or residence permit is merely a residence permit and a separate question, see the article on Turkey residence permit and citizenship).

On the tax axis, the 20/D regime has two strong characteristics: a 0% rate specifically on foreign-source income and a 20-year term with an entry condition of "3 years without Turkish attachment."

For comparison, the Spanish Beckham Law is a regime for relocating specialists (impatriates) for 6 tax periods: 24% on employment income up to €600,000 and 47% on excess; foreign passive income may be outside the Spanish base, but this is not a general 0% on any foreign income. Similar constructions exist in other jurisdictions—remittance-based taxation of foreign income or territorial regimes—but the Turkish one stands out for its length (20 years) and direct 0% rate on foreign source.

The main practical difference: the Beckham regime is shorter but procedurally mature and with a strict entry form; the Turkish one is longer and potentially stronger, but its procedural base is younger: the law was published on June 4, 2026, and forms and procedure are set by the Ministry of Finance circular.

Scenarios Where the Regime May Be of Interest

Founder with a Foreign Holding

For example, an operating company in Hong Kong or Singapore: if the company itself, the board of directors, clients, and intellectual property (IP) are genuinely outside Turkey, dividends and capital gains may become the central benefit of the regime. But controlled foreign company (CFC) rules in the departure country and the risk of recognizing a permanent establishment in Turkey if management is actually conducted from Turkey must be checked.

Portfolio Investor

Foreign brokerage accounts, dividends, coupons, and capital gains—the cleanest scenario. But automatic exchange of tax information (Common Reporting Standard, CRS), know your customer (KYC), proof of source of funds, and tax residency of the previous country do not disappear.

Family with Foreign Real Estate

Rental income and future sale of real estate outside Turkey may fall within the regime if the source of income is not Turkish. At the same time, Turkish real estate remains outside the benefit.

Remote Specialist

The most controversial case. If a person physically works from Turkey, one should not promise "0% on salary" but first determine the source of income and the risk of Turkish business registration or permanent establishment.

Former Resident of Russia or the EU

The Turkish benefit does not close the tax "tail" of the departure country: controlled foreign companies (CFC), exit tax, residency by center of vital interests, remittance-based taxation rules, and banking compliance.

Sportspersons: Withholding Under Temporary Article 72 and the Federation Filter

For professional sportspersons the Turkish position is not built on the ordinary scale but on a special withholding under temporary Article 72 of Income Tax Law No. 193 (GVK geçici madde 72). Payments that count as wages, or are treated as wages, are taxed at source at a rate tied to the level of the league.

The 20% top-league rate and the extension of the provision's term (31/12/2019 in the original wording, then 31/12/2023) were introduced by Law No. 7194, applicable from 1 January 2020; contracts signed before 1 November 2019 and not amended after that date keep the earlier 15% until they expire. Law No. 7491, Article 13 extended temporary Article 72 through 31 December 2028, so it applies in 2026; the operative wording should still be checked as at the date the contract is signed.

How this sits against the ordinary scale. GİB's current Wage Income Guide states that the 2026 employment-income rates are 15%, 20%, 27%, 35% and 40%, with the fourth-bracket threshold at TRY 5,300,000. The 20% withholding is therefore not final: where a Turkish tax resident's aggregate income within geçici 72 exceeds that threshold, an annual return is due in March of the following year, the tax withheld is credited, and the effective burden is pulled up towards 40%. This is a calendar-year test, not a sporting-season test — a point to check in contracts that straddle the new year. Fast-track ("exceptional") naturalisation of an athlete does not move the tax rate: geçici 72 attaches to the payer and the league tier, not to the passport.