Turkey 20 Year Tax Break: where Turkish-source income sits
Why salary and fees for work done in Turkey, Turkish rent and Turkish dividends stay taxed at 15% to 40% under the 20-year exemption.
Last verified 2026-10-21Next review 2027-01-214 official sources
Whether Turkey works for you depends on how you earnTalk it through
Turkey 20 year tax break covers only income earned outside Turkey. Income from Turkish sources stays taxed at the normal rates of 15% to 40%, even for someone who holds the exemption certificate. That includes rent from a Turkish flat, dividends from a Turkish company and, most often missed, pay for work you do while you are physically in Turkey.
What the law says
Article 20/D of the Income Tax Law (Gelir Vergisi Kanunu, or GVK) exempts "earnings and income obtained outside Türkiye" for 20 years. It says nothing about income obtained in Turkey. Tebliğ 333, the Finance Ministry communiqué that explains how 20/D works, makes the point directly in Article 3(7): earnings and income obtained in Turkey are not covered by the exemption.
So the question for every income stream is the same: is it Turkish-source or foreign-source? Article 7 of the Income Tax Law answers it. The place where the money is paid in, or the currency, does not decide it.
The Article 7 source rules for work
Under GVK Article 7, wages are Turkish-source when the service is performed in Turkey or evaluated (used) in Turkey. Self-employment income follows the same idea: it is Turkish-source when the activity is carried out or evaluated in Turkey.
Tebliğ 333 gives an example that settles the most common question. In Example 10, an engineer lives in Turkey and advises clients who are resident abroad. The fees come from foreign clients, but the work is done in Turkey. The communiqué says this self-employment income is taxed in Turkey and is outside the exemption.
The same reading applies to a remote employee. If you live in Istanbul and work on a laptop for an employer in London or New York, the work is performed in Turkey. Your salary is Turkish-source income for Turkish tax purposes. The 20-year exemption does not cover it.
Some articles about 20/D get this wrong. A claim that you can "pay zero tax on your remote salary" in Turkey does not fit Example 10.
Common income types, side by side
| Income | Source | Under 20/D |
|---|---|---|
| Salary for work done while living in Turkey, paid by a foreign employer | Turkish (GVK Art. 7) | Taxed at 15% to 40% |
| Freelance or consulting fees for work done in Turkey, from foreign clients | Turkish (Tebliğ 333, Example 10) | Taxed at 15% to 40% |
| Rent from a property in Turkey | Turkish (Tebliğ 333, Example 9) | Taxed |
| Dividends from a Turkish company | Turkish (Tebliğ 333, Example 11) | Taxed |
| Rent from a property abroad | Foreign (Examples 8 and 11) | Exempt with the certificate |
| Dividends from a foreign company | Foreign (Example 11) | Exempt with the certificate |
Example 11 in Tebliğ 333 shows both sides for one person. Rent from a property in Monaco and dividends from a Spanish company are exempt. Dividends from a Turkish company are taxed. For other foreign income, such as interest and capital gains, see what foreign income is covered.
The 2026 income tax rates
Turkish-source income of a resident is taxed on the progressive scale in GVK Article 103. For 2026 income the bands are set by Tebliğ 332 (Official Gazette of 31 December 2025).
| Taxable income | Rate |
|---|---|
| Up to TRY 190,000 | 15% |
| TRY 190,000 to TRY 400,000 | 20% |
| TRY 400,000 to TRY 1,000,000 (wages: to TRY 1,500,000) | 27% |
| TRY 1,000,000 to TRY 5,300,000 (wages: TRY 1,500,000 to TRY 5,300,000) | 35% |
| Above TRY 5,300,000 | 40% |
The total tax at the top threshold is TRY 1,737,500 on TRY 5,300,000 of income (TRY 1,697,500 for wages). Above that, each extra lira is taxed at 40%.
Tebliğ 332 also sets some 2026 amounts that matter for Turkish-source income:
- Rent from residential property in Turkey has an exemption of TRY 58,000 a year.
- Some capital gains under GVK mükerrer Article 80 have an exemption of TRY 150,000.
- The filing threshold for investment and rental income that was not taxed at source is TRY 22,000.
Each of these has conditions in the law. Check them against your own case with a Turkish accountant before you rely on them.
How filing works with both kinds of income
Exempt foreign income is not declared at all. Paragraph 3 of Article 20/D says no annual return is filed for it. If you must file a return for Turkish income, you leave the exempt foreign income out of it (Tebliğ 333, Article 3(6) and Example 8).
Two rules stop you from mixing the two:
- Costs linked to exempt foreign income cannot be deducted from taxable Turkish income (Tebliğ 333, Article 3(8)).
- Tax paid abroad on exempt income cannot be credited against Turkish tax (Tebliğ 333, Article 3(9)).
Who the exemption helps most
Because work done in Turkey is taxed, 20/D mainly helps people whose income is passive or earned abroad. That means foreign dividends, interest, rent and capital gains, and income from businesses abroad where the work is not done in Turkey. A retiree living on foreign investments, or an owner whose company is run by managers abroad, fits it well.
It fits poorly if most of your income is a salary or fees for work you would do from your Turkish home. In that case you would pay normal Turkish rates on that income, possibly up to 40%. Compare that with what you pay today before you move.
What is not yet established. A foreign company that you own and run from Turkey raises two open questions. Turkey could treat the company as managed from Turkey, or apply its controlled foreign company rules. Neither 20/D nor Tebliğ 333 deals with this, so dividends from such a company are not safely "foreign" until the tax office or a ruling says so. See what the exemption does not solve.
Turkish income before you move
Turkish-source income also matters before you become resident. Turkish rent, dividends, interest and capital gains in the three years before do not block the exemption (Tebliğ 333, Example 5). Turkish wages (Example 6) or Turkish business income (Example 7) in those years do block it. The details are on who qualifies.
For the full picture of the regime, start with the 20-year tax exemption guide.
Common questions
- Is my remote salary tax free in Turkey under the 20-year exemption?
- No. Under Article 7 of the Turkish Income Tax Law, wages are Turkish-source when the work is performed in Turkey. If you live in Turkey and work for a foreign employer from there, the salary is taxed at the normal rates of 15% to 40%. Tebliğ 333 Example 10 applies the same rule to self-employment fees from foreign clients.
- Is rent from my Turkish flat covered by the 20-year exemption?
- No. Rent from property in Turkey is Turkish-source income and stays taxable (Tebliğ 333, Example 9). For 2026 there is an exemption of TRY 58,000 a year for residential rent income, subject to its conditions.
- What tax rates apply to Turkish-source income in 2026?
- The progressive scale under Income Tax Law Article 103: 15% up to TRY 190,000, then 20%, 27% and 35%, and 40% above TRY 5,300,000. The 27% band ends at TRY 1,000,000 for most income and at TRY 1,500,000 for wages.
- Can I deduct costs of my foreign income from my Turkish income?
- No. Tebliğ 333 Article 3(8) says costs linked to exempt foreign income cannot be deducted when computing taxable income. Foreign tax paid on exempt income also cannot be credited against Turkish tax (Article 3(9)).
Whether Turkey works for you depends on how you earn
Where you live is only half of it. We can walk through your position with you, including the cases where Turkish tax residency does not give the result people expect. This is general information, not tax advice for your circumstances.
Sources
Every legal, fee and procedural statement on this page is taken from the sources below and was checked on 2026-10-21. Where they change, this page changes.
- Income Tax Law No. 193, consolidated text (mevzuat.gov.tr) — Tax residency (Articles 4 and 5), source rules (Article 7) and the 20-year exemption (Article 20/D)
- Law No. 7582, Official Gazette No. 33270 of 4 June 2026 (resmigazete.gov.tr) — Adds Article 20/D to the Income Tax Law, the 1% inheritance rate and the asset peace window
- Income Tax General Communiqué No. 333, Official Gazette No. 33300 of 4 July 2026 (resmigazete.gov.tr) — How the Article 20/D exemption is applied: eligibility, the exemption certificate and its deadline
- Income Tax General Communiqué No. 332, Official Gazette No. 33124 of 31 December 2025 (resmigazete.gov.tr) — 2026 income tax bands, the TRY 58,000 residential rent exemption, the TRY 150,000 capital gains exemption and the TRY 22,000 filing threshold
Related
This page is general information about Turkish rules as published by the authorities named above. It is not legal or tax advice for your circumstances, and immigration outcomes depend on your nationality, documents and individual case. See our legal and tax information disclaimer.