Foreign Nationals Deemed To Have Settled İn Türkiye Will Be
Granted A 20-Year Tax Exemption
Income tax exemption and inheritance tax rate reduction applied to
individuals deemed to be resident in Turkey, effective from January 1, 2026.
According to the provisions of Article 20/D added to the Income
Tax Law, individuals deemed to have resided in Turkey from 01/01/2026 onwards,
provided they meet the following conditions for the last three calendar years
prior to being deemed to have resided in Turkey:
-Not having a domicile in Turkey,
-Not having tax liability in Turkey for commercial, agricultural,
professional income and wage income (excluding tax liabilities due to real
estate capital income, movable capital income and capital gains obtained in
Turkey),
These individuals' earnings and income obtained outside of Turkey
will be exempt from income tax for a period of 20 years. Furthermore, for these
individuals, during the period they benefit from the exemption, the inheritance
and transfer tax rate will be applied at 1%* for property transfers made
through inheritance from Turkey or abroad.
For foreign income and earnings covered by this exemption:
- No annual tax return will be filed; even if a tax return is
filed due to other income, these earnings will not be included in the return.
- Expenses and costs related to income and earnings covered by the
exemption will not be taken into account in determining taxable income and
earnings.
- Taxes paid abroad related to income and earnings covered by the
exemption cannot be deducted from income tax assessed in Turkey.
If it is subsequently determined that the conditions for the
exemption are not met, the unaccrued taxes will be considered a tax loss.
Effective Date of Application:
This application entered into force on June 4, 2026, to be applied
to those deemed to have settled in Turkey from January 1, 2026 onwards.
* Inheritances
are subject to a progressive tax rate, with inheritance and transfer tax rates
ranging from 1% to 10%.