Türkiye's 20-Year Foreign Income Tax Exemption
What the exemption actually does
Law No. 7582 inserted a new article — Mükerrer Madde 20/D — into Türkiye's Income Tax Law (Law No. 193). It lets qualifying individuals who become Turkish tax residents treat their foreign-source income and capital gains as exempt from Turkish income tax for twenty years. That income never enters the Turkish tax base: it is not declared, not taxed, and not aggregated with any other income you might report in Türkiye.
Unlike the non-dom regimes in Italy or Greece, there is no annual lump-sum charge. Where those countries ask for €100,000–€300,000 a year to shelter foreign income, Türkiye asks for nothing on qualifying foreign earnings — the rate is simply 0%. That is what makes the measure unusual, and why it has drawn comparisons to the most competitive residence regimes in Europe.
The exemption in one screen
- 20 years of 0% Turkish income tax on foreign-source income and gains.
- Open to new residents from 1 January 2026 — any nationality, including returning Turks.
- You must have had no Turkish domicile and no Turkish tax liability in the prior three calendar years (with narrow exceptions).
- Exempt foreign income is not even declared on a Turkish return.
- Trade-off: no deduction of related expenses, and no credit for foreign tax paid on that income.
Are you eligible? The three-year non-residence test
The gateway has two parts. First, you must become a Turkish tax resident from 1 January 2026 onward. Second — and this is where most questions arise — in the three calendar years before you became resident, you must have had neither a domicile in Türkiye nor a Turkish tax liability.
Two points matter here. The lookback is measured in full calendar years, not a rolling 36 months counted back from your arrival date. And a single disqualifying year defeats the claim — you cannot average it out. If you were a Turkish taxpayer in even one of those three years (outside the protected categories below), you fall out of scope.
The protected exceptions
Not every past connection to Türkiye disqualifies you. The law expressly protects prior tax liability that arose only from passive Turkish assets — specifically:
- income from immovable property (for example, rent from a Turkish flat you own);
- income from movable capital (Turkish investment income such as interest or dividends); and
- capital gains on Turkish assets.
In other words, owning a holiday home in Antalya and declaring the rent, or holding a Turkish brokerage account, does not by itself burn your eligibility. We work through the edge cases in who qualifies for the 20-year exemption.
What disqualifies you
The exclusions are equally specific. You are out of scope if, during the three-year window, you had:
- Turkish employment income — earning a salary in Türkiye in the lookback period denies the exemption;
- commercial, professional or business tax liability in Türkiye; or
- full-taxpayer residence — i.e. you were already a Turkish tax resident.
Becoming a Turkish tax resident (the gateway)
You cannot claim the exemption without first becoming a Turkish tax resident — the very status that, for everyone else, brings worldwide income into tax. Under general Turkish rules, an individual is treated as a full taxpayer if they establish a domicile in Türkiye or stay in the country for more than six months in a calendar year. For new residents who meet the three-year test, Mükerrer Madde 20/D then carves the foreign income back out. Timing your move — and documenting it — is therefore central; see how to become a Turkish tax resident.
What foreign income is covered
The exemption reaches income and earnings derived outside Türkiye, broadly across the categories the Income Tax Law recognises. In practice that includes:
| Income type | Example | Exempt for new residents? |
|---|---|---|
| Foreign dividends | Dividends from a company abroad | Yes |
| Foreign interest & investment returns | Interest, bond and fund income held offshore | Yes |
| Foreign rental income | Rent from property outside Türkiye | Yes |
| Foreign capital gains | Gain on selling overseas shares or property | Yes |
| Foreign employment / business profit | Salary or profit earned and sourced abroad | Yes (see the remote-work caveat) |
| Foreign pensions | A pension paid from abroad | Yes |
Detail and worked examples are in what foreign income is covered.
What is not covered
The exemption is about foreign-source income. It does nothing for Türkiye-sourced income, which stays fully taxable under the normal rules — Turkish salary, profits from a Turkish business, rent from Turkish property. It also does not touch other taxes: VAT, property tax, motor vehicle tax and stamp or transaction taxes all still apply.
The trade-offs: no deductions, no foreign tax credit
Exemption cuts both ways. Because the foreign income never enters the Turkish base, you cannot deduct expenses connected to it, and you cannot credit foreign taxes you paid on it against Turkish income tax. For most people with lightly taxed foreign income this is a clear win; for someone with heavily taxed foreign income and large deductible costs, the maths deserves a closer look — see the no-credit rule explained.
The 1% inheritance and gift tax bonus
The same package pairs the income-tax exemption with a preferential 1% inheritance and gift tax rate for eligible new residents during the exemption period — against a normal schedule that rises to around 10%. For families relocating significant wealth, this is a substantial secondary benefit; details in the 1% inheritance tax guide.
How it compares to Italy, Greece and others
| Country | Annual charge on foreign income | Maximum duration |
|---|---|---|
| Türkiye | None — 0% on qualifying foreign income | 20 years |
| Italy | €300,000 flat per year (2026 Budget) | Up to 15 years |
| Greece | €100,000 flat per year | Up to 15 years |
Türkiye's combination of a longer horizon and no annual charge is genuinely competitive. The fuller comparison — including the UAE and Portugal — is in Türkiye vs Italy, Greece and the UAE.
How to claim it, and what to keep
The exemption entered force on publication (4 June 2026) but applies to individuals treated as resident from 1 January 2026 — a limited retroactive reach. The procedural mechanics, including any documentation or certificate the tax administration will require, are being set out in Ministry of Treasury and Finance communiqués, some of which are still being issued. What is already clear is that the burden of proof sits with you. Keep, for each of the three lookback years, evidence of where you were resident and domiciled, and — if you had any Turkish tax liability — proof that it fell within the protected passive categories.
Planning a move to Türkiye — or already resident?
Whether you qualify turns on the detail of your last three years, your income mix and your timing. Bayraktar Attorneys advises foreign nationals and returning professionals on structuring the move and evidencing the claim.
Talk to a Turkish tax & residency lawyer →Frequently Asked Questions
How long does the Turkish foreign income exemption last?
Do I have to be a foreigner to qualify?
I owned a flat in Türkiye and declared the rent. Am I disqualified?
Is my foreign salary exempt if I work remotely from Türkiye?
Can I credit foreign taxes I already paid against Turkish tax?
Does exempt foreign income go on a Turkish tax return?
When does the exemption take effect?
What happens if I claim it and the conditions were not met?
Sources & Legal References
- Law No. 7582, Official Gazette No. 33270, 4 June 2026 (Income Tax Law, Mükerrer Madde 20/D)
- KPMG — Türkiye: New 20-Year Foreign Income Exemption and 'Asset Peace' Regime — kpmg.com
- Turkish Minute — Türkiye passes wealth amnesty and 20-year foreign income tax break — turkishminute.com