Turkey enacts a 20-year, 0% tax holiday on foreign income

Turkey has put one of the boldest residence-based tax offers in the world onto its statute book. Law No. 7582, published in the Official Gazette (No. 33270) on 4 June 2026, exempts the foreign-source income of new Turkish tax residents from income tax for twenty years. Parliament passed it on 21 May; President Erdoğan signed it on 3 June.

The core sits in a new Article 20/D of the Income Tax Law. The mechanics are clean.

What the law does

• 0% for 20 years on foreign income. Overseas dividends, interest, rent, business and service income, and capital gains earned outside Turkey are fully exempt. Exempt income goes on no Turkish return.
• For new residents from 1 January 2026. The break is for people becoming Turkish tax residents from the start of 2026 onward.
• A three-year clean slate. You must have had no Turkish tax residence and no active Turkish business liability in the three calendar years before you move. A passive past link, such as rent once earned on a Turkish flat, does not by itself disqualify you.
• Inheritance at 1%. While the exemption runs, assets passing on death are taxed at a flat 1%, against a normal scale that climbs toward 30%.

The same package widened the Istanbul Finance Center incentives, taking the financial-services export deduction to 100% and extending it to 2047, and opened a wealth-declaration window running to 31 July 2027.

The line that matters

This is a residence benefit, not a passport one. A Turkish passport on its own still carries no tax advantage, exactly as it never did. What the law rewards is becoming a genuine Turkish resident: settling here, basing your year here. And only foreign-source income is covered. Turkish rent, Turkish business profit and gains on Turkish property remain taxable at the normal 15% to 40%.

That distinction is the whole strategy. The investor who buys an Istanbul apartment for the $400,000 citizenship route gets a passport from the purchase, and a home that can make them resident. The residence, not the passport, is what flips their foreign income to zero for two decades.

Why now

The timing is not an accident. The UK ended its non-dom regime in 2025, Portugal narrowed NHR in 2024, and Italy’s flat-tax alternative runs €200,000 a year. Turkey has undercut all of them with a true 0%, a 20-year horizon, and a citizenship attached. Analysts expect capital to move not only from the Gulf but from the UK, Europe and North America.

A caution worth keeping: Law No. 7582 is days old, and the Treasury’s implementing communiqués were still being issued at the time of writing. The principle is firm; the procedural detail is still settling. Anyone planning around it should confirm the specifics with a Turkish tax advisor, and remember that home-country rules (US worldwide taxation, UK exit rules, treaty positions) are unaffected.

We have written the full breakdown, including who qualifies, what is covered, and how it pairs with the passport and the US E-2 route, on our Turkey tax residency guide.