What Foreign Income Is Covered (and What Isn't)
What "foreign-source" actually means
Türkiye's 20-year exemption shelters foreign-source income and capital gains — and the phrase does a lot of work. In broad terms, income is foreign-source when its economic origin lies outside Türkiye: the company paying a dividend is abroad, the property earning rent sits abroad, the bank holding the deposit is abroad, the asset that was sold is abroad. If you become a Turkish tax resident from 1 January 2026 and clear the three-year non-residence test, that foreign-source income is exempt from Turkish income tax for twenty years, at a 0% rate with no annual lump-sum charge.
The mirror image matters just as much. Turkish-source income is never covered, and one grey area — remote work performed while you are physically in Türkiye — is genuinely unsettled. We flag it below and treat it in depth in the Turkish-source income trap.
The covered categories, one by one
Mükerrer Madde 20/D reaches the ordinary building blocks of an internationally mobile person's finances. Each of the following is exempt when it is genuinely foreign-source:
| Income type | Typical example | Covered? |
|---|---|---|
| Foreign dividends | Dividend from shares in a company incorporated abroad | Yes — exempt |
| Foreign interest & investment returns | Interest on a foreign bank deposit; coupons or fund distributions abroad | Yes — exempt |
| Foreign rental income | Rent from a flat you own in another country | Yes — exempt |
| Foreign capital gains | Gain on selling foreign shares, a foreign property or a foreign business | Yes — exempt |
| Foreign employment / business profit | Salary or profit from work and business genuinely carried on abroad | Yes — exempt (subject to the remote-work caveat) |
| Foreign pensions | A private or state pension paid from another country | Yes — exempt |
| Any Turkish-source income | Turkish salary, Turkish business profit, Turkish rent | No — taxed normally |
Two quick worked examples. A retiree who moves to Antalya and draws a €2,000 monthly pension from Germany pays no Turkish income tax on it. An investor holding a US brokerage account keeps her foreign dividends, interest and realised gains outside the Turkish tax net entirely — she does not even declare them (see whether you still file a return).
Turkish-source income is never covered
The exemption is a shelter for money earned abroad, not a general tax holiday. Income with a Turkish source stays fully taxable under the normal rules: a salary from a Turkish employer, profit from a business you run in Türkiye, and rent from a Turkish property are all outside the exemption. If you own a shop in Izmir or take a local directorship, that income is taxed exactly as it would be for any other resident.
Still payable even with the exemption
- VAT on goods and services you buy in Türkiye.
- Property tax on Turkish real estate you own.
- Motor vehicle tax on cars registered in Türkiye.
- Stamp and transaction taxes on qualifying documents and dealings.
- Income tax on any genuinely Turkish-source earnings.
The exemption is a shield against Turkish income tax on foreign earnings — not a blanket immunity from the wider Turkish tax system.
The remote-work caveat
The hardest case is work you perform with your laptop while sitting in Türkiye for an employer or client abroad. Here the source is contested: even though the payer is foreign and pays in foreign currency, the work is physically performed in Türkiye, and it may therefore be treated as Turkish-source and taxable. The implementing communiqué that would settle the point has not yet been fully issued, so this remains an area of genuine uncertainty rather than a decided rule.
Map your income before you move
Whether each stream is foreign-source or Turkish-source decides your tax bill for twenty years. Bayraktar Attorneys reviews your dividends, rent, pensions and work arrangements against Mükerrer Madde 20/D and the residency rules.
Talk to a Turkish tax lawyer →