Türkiye’s 20-Year Foreign Income Tax Exemption Becomes Law

Türkiye’s 20-year foreign income tax exemption has officially entered into force.

After being approved by Parliament in May, the measure has now been published in the Official Gazette as Law No. 7582, completing the legislative process and providing greater certainty for investors, entrepreneurs, and internationally mobile individuals considering a move to Türkiye.  

The reform was first announced by President Recep Tayyip Erdoğan in April as part of a broader package of tax and investment measures. While earlier discussions focused on the proposal and its passage through Parliament, publication in the Official Gazette means the regime is now law.  

The legislation introduces a 20-year exemption from Turkish taxation on qualifying foreign-source income and gains for eligible new residents, alongside a preferential inheritance tax regime and additional incentives designed to attract capital and economic activity.  

What Has Changed?

The most important development is that the law has now been gazetted and entered into force.

According to the Official Gazette publication, 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.  

This moves the discussion from legislative approval to implementation.

Who Can Benefit?

The regime is intended for individuals who establish Turkish tax residency and who 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.  

The framework is therefore aimed at individuals relocating to Türkiye after a meaningful period outside the Turkish tax system.

What Does the Exemption Cover?

Under the new law, qualifying foreign-source income and gains are exempt from Turkish taxation for a period of 20 years. Turkish-source income remains taxable under the country’s standard tax rules.  

The legislation represents a notable exception to the general principle that Turkish tax residents are taxed on worldwide income. For qualifying individuals, foreign-source income and gains are separated from income generated within Türkiye.  

The 1% Inheritance Tax Provision

The Official Gazette publication also confirms a 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 Turkey’s standard inheritance and transfer tax framework, which is progressive.  

The provision may be particularly relevant for internationally mobile families considering long-term wealth and succession planning.

Part of a Wider Reform Package

The foreign income tax exemption forms part of a broader legislative package.

Reuters reported that the same law includes corporate tax reductions for manufacturing companies, incentives for bringing assets held abroad into Türkiye, and extended tax advantages linked to the Istanbul Financial Centre.  

PwC’s earlier review of the draft legislation also highlighted measures involving qualified service centers, corporate tax incentives, and provisions designed to encourage investment and capital inflows.  

What This Means for Investors

The publication of Law No. 7582 removes much of the uncertainty that surrounded the proposal when it was first announced.

The focus now shifts from whether the regime will be implemented to how investors, entrepreneurs, and new residents may use it in practice.

For those considering relocation to Türkiye, the law introduces a 20-year exemption on qualifying foreign-source income and gains, a timeframe that exceeds many comparable European tax residency regimes. At the same time, eligibility requirements, residency planning, and cross-border tax obligations remain important considerations that require professional advice.  

Final Take

The publication of Law No. 7582 marks the final step in bringing Türkiye’s 20-year foreign income tax exemption into force.

What began as a policy announcement in April has now become enacted law. For investors, entrepreneurs, and internationally mobile families, the key question is no longer whether the regime will be implemented, but how it will operate in practice and who will be best positioned to benefit from it.

With the law now gazetted, Türkiye’s long-term foreign income tax exemption moves from proposal to reality, making it one of the most closely watched tax residency developments of 2026.