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Türkiye’s New Tax Exemption Law
Published: July 28, 2026
Türkiye has taken a major step to attract global capital and encourage the return of Turkish citizens living abroad. The Turkish Grand National Assembly has approved the first articles of a sweeping new legislative package that introduces a 20-year income tax exemption on foreign-earned income brought into the country, along with debt restructuring relief and new incentives for tech startup employees.
Here’s a complete breakdown of what the law covers, who qualifies, and why it matters.
What Is Türkiye’s New Tax Exemption Law?
The law, officially part of the “Law Proposal on Amendments to Certain Laws,” was passed alongside Türkiye’s broader “asset peace” regulations. Its core purpose: make it financially attractive for individuals — particularly Turkish citizens, investors, professionals, and entrepreneurs living overseas — to relocate to Türkiye and bring their foreign income and assets with them.
The measure is designed to boost foreign currency inflows, draw international capital into the Turkish economy, and reverse the “brain drain” of skilled professionals who left the country in recent years.
Key Details of the 20-Year Income Tax Exemption
Under the new regulation, individuals who become tax residents of Türkiye will be exempt from income tax for 20 years on earnings and revenue generated abroad — but only if they meet a critical eligibility condition.
Who Qualifies?
To benefit from the exemption, individuals must have had no residence or full taxpayer status in Türkiye during the three calendar years immediately before relocating. This is aimed squarely at returning expatriates and new arrivals rather than existing residents seeking a tax loophole.
Notably, people who previously held Turkish taxpayer status solely due to rental income, investment income, or capital gains will still remain eligible — a detail that widens the pool of qualifying individuals.
What the Exemption Covers
According to the approved text, the following rules apply to exempt overseas income:
- No annual tax declarations required for foreign earnings covered by the exemption.
- Exempt income will not be included in tax filings, even when declarations are submitted for other income sources.
- Expenses and costs tied to the exempt income won’t factor into taxable income calculations in Türkiye.
- Foreign taxes paid on exempt income cannot be deducted from any tax calculated in Türkiye.
Enforcement and Oversight
If authorities later determine that an individual didn’t actually meet the eligibility conditions, any unpaid taxes will be treated as tax losses, triggering legal proceedings. The Ministry of Treasury and Finance will be responsible for setting out the detailed implementation rules.
Effective Date
The exemption applies to individuals considered settled in Türkiye as of January 1, 2026.
Reduced Inheritance Tax on Exempt Assets
The package also amends Türkiye’s Income Tax Law regarding inheritance and asset transfers. Overseas earnings that qualify for the 20-year exemption — along with assets transferred through inheritance during that exemption period — will be taxed at a reduced inheritance and transfer tax rate of just 1%, a significant cut from standard rates.
Public Debt Restructuring: Up to 72 Months
Beyond the tax exemption, the legislation also updates Türkiye’s law on the collection of public receivables, giving financially strained debtors more breathing room.
- Public debts can now be restructured into installments of up to 72 months if immediate repayment would cause financial hardship.
- No collateral is required for debts under 1 million Turkish liras.
- For debts above that threshold, collateral equal to half of the amount exceeding 1 million liras will be required.
- The President has authority to raise this threshold up to tenfold or cut it in half, giving the government flexibility to adjust the policy over time.
Tax Incentives for Tech Startup Employees
The final major piece of the package targets Türkiye’s technology sector. It raises the income tax exemption ceiling for company shares granted free of charge or at a discount to employees of qualified tech startups meeting criteria set by the Ministry of Industry and Technology.
Under the new rule, the exemption ceiling is now twice the employee’s annual gross salary — a meaningful boost designed to make equity compensation more attractive for startup talent and help Turkish tech companies compete for skilled workers.
Why This Law Matters
Taken together, these measures reflect a coordinated push by Türkiye to:
- Attract foreign capital and currency by making it more appealing for wealthy individuals and investors to relocate.
- Encourage reverse migration of Turkish citizens and skilled professionals who have been living and working abroad.
- Support the domestic tech ecosystem by making startup equity compensation more tax-efficient.
- Ease financial pressure on taxpayers and businesses struggling with public debt through longer restructuring terms.
For Turkish expatriates considering a return home, or foreign investors weighing where to relocate assets, this law creates one of the most generous long-term tax incentives currently available in the region — a two-decade window free of Turkish income tax on qualifying foreign earnings.
Bottom Line
Türkiye’s new tax exemption law represents a significant shift in the country’s approach to attracting global talent and capital. With a 20-year income tax exemption on overseas earnings, a reduced 1% inheritance tax rate, extended debt restructuring options, and stronger startup equity incentives, the legislation offers concrete financial advantages for returning citizens, international investors, and tech professionals alike.
As implementation details are finalized by the Ministry of Treasury and Finance, individuals considering relocation to Türkiye should consult a qualified tax advisor to understand exactly how these provisions apply to their specific circumstances.