Turkey's 20-year tax exemption on foreign income

What the law says

Turkey (officially Türkiye) added Article 20/D to its Income Tax Law No. 193 through Law No. 7582. Parliament accepted the law on 21 May 2026, and it was published in the Official Gazette on 4 June 2026. The exemption took effect on publication and applies to people treated as resident from 1 January 2026 (Law 7582, Article 14(a)).

The core sentence of Article 20/D, in our working translation: the earnings and income obtained outside Turkey by individuals deemed resident in Turkey are exempt from income tax for twenty years, on condition that they had no domicile and no tax liability in Turkey during the last three calendar years before they were deemed resident.

The Ministry of Treasury and Finance then set the detailed rules in Income Tax General Communiqué No. 333 (Tebliğ 333), published on 4 July 2026. A communiqué is an official guidance text that the tax offices follow. It contains 13 worked examples, and most of the answers on this site come from them.

The conditions at a glance

Some earlier Turkish tax liability does no harm. If you paid Turkish tax only on Turkish rent, Turkish dividends or interest, or Turkish capital gains, you can still qualify. Turkish wages or Turkish business income in the look-back years rule you out (Tebliğ 333, Examples 5 to 7). The details are on who qualifies.

What 0% covers, and what it does not

The law exempts all "earnings and income obtained outside Turkey". It gives no list of income types and excludes none. The communiqué confirms foreign rent and foreign dividends with examples, such as rent from a property in Monaco and dividends from a Spanish company (Example 11). Advisers such as EY read it to cover foreign income and gains generally, which would include foreign interest, foreign capital gains and pensions from abroad.

Where the work happens matters more than where the client sits. Under Income Tax Law Article 7, wages and self-employment income are Turkish-source when the work is done in Turkey. Tebliğ 333, Example 10, describes an engineer who lives in Turkey and advises clients abroad. His fees are taxed in Turkey because he does the work in Turkey.

So a remote employee or freelancer who works from Istanbul for a foreign company does not get 0% on that salary or those fees. The regime mainly helps two groups: people with passive foreign income (dividends, interest, rent, capital gains), and owners of businesses abroad whose work is not done from Turkey.

Turkish-source income is taxed at the normal 2026 rates of 15% to 40% (Tebliğ 332). Two more rules apply to exempt income. You cannot deduct costs linked to it, and you cannot credit foreign tax paid on it against Turkish tax (Tebliğ 333, Art. 3(8) and 3(9)). If another country withholds tax on your dividends, that tax becomes a final cost. You also file no Turkish return for exempt income. See which foreign income is covered and Turkish-source income.

It is not automatic: the certificate and its deadline

To use the exemption you must hold an exemption certificate, the İstisna Belgesi (in full, "Yurt Dışından Elde Edilen Kazanç ve İratlar İçin İstisna Belgesi", form EK-1). You apply to the tax office responsible for assessing you. The office checks your last three years and your current residence, then issues it (Tebliğ 333, Art. 4).

The deadline is the end of the calendar year in which you become resident. If you become resident in November or December, you have until the end of February of the next year. Late applications are refused. In Example 2 of the communiqué, a person resident from 2 March 2028 applied on 1 May 2030 and was refused.

• Resident between 1 January and 31 October 2026: apply by 31 December 2026.
• Resident in November or December 2026: apply by 28 February 2027.

You can only apply once you are already resident, because the communiqué requires residence on the date of application. Some articles online give 31 July 2027 as the deadline. That date belongs to the asset peace (varlık barışı), a separate measure in Law 7582 for declaring assets to Turkish banks. It has nothing to do with Article 20/D. The full steps are on how to claim the exemption.

Tax residency and a residence permit are different things

The exemption depends on Turkish tax residency under Income Tax Law Article 4. You are resident if your domicile is in Turkey (the place where you live with the intention of settling, under the Civil Code), or if you stay in Turkey for more than six months in one calendar year. Temporary absences do not break the six months.

A residence permit lets you stay in Turkey. It does not by itself make you a tax resident. A tax residency in turn gives you no right to stay. Most people who use this regime will need both: a permit such as a short-term residence permit, and a real move of their home to Turkey. Article 5 also says that foreigners who come for a set temporary job, or for study, treatment, rest or travel, are not resident even after six months. See Turkish tax residency rules.

How the 20 years are counted

The law says only "for twenty years". Accounting commentary reads this as 20 calendar years starting with the year you become resident, so a person resident in 2026 would be covered for 2026 to 2045. We say "20 years from the year you become resident" and give no firm end date.

Losing the exemption

If it later turns out that you did not meet the conditions, the certificate is cancelled from your original residence date. The tax office then collects the unpaid tax with a tax loss penalty (vergi ziyaı cezası) and late payment interest. In Example 12, an audit in 2027 found undeclared Turkish business income from 2025 and 2026, and the certificate was cancelled back to the 2026 residence date. Check your history for the look-back years before you apply.

Inheritance tax during the 20 years

Law 7582 also set a flat 1% inheritance tax rate for transfers by inheritance during the exemption period of a person who uses Article 20/D. Gifts are not included and stay on the normal 10% to 30% scale. The law does not say whether the certificate holder must be the person who dies or the heir. See inheritance and gift tax.

What it does not change

Article 20/D removes Turkish income tax on foreign income. It does not touch VAT, stamp duty or property tax in Turkey. It cannot change what another country taxes either. Your former country may still treat you as resident under its own rules, or tax you when you leave. The United States taxes its citizens wherever they live, so a US citizen in Turkey still has US tax to deal with. A country where income arises can also keep withholding tax on it. Read what the exemption does not solve before you plan around it.

Guides in this section

• Who qualifiesThe three-year look-back, which earlier Turkish income is harmless, and former residents.
• Which foreign income is coveredDividends, rent, interest and gains, and why work done in Turkey is taxed.
• Turkish-source incomeWhat stays taxed at 15% to 40% while you hold the certificate.
• Inheritance and gift taxThe 1% inheritance rate for exemption holders, and why gifts are not included.

For the immigration side of the move, start at Turkey residency.