Turkey 20-Year Tax Holiday: Parliament Approves 0% on Foreign Income

The Turkey 20-year tax holiday just cleared its biggest hurdle. On 21 May 2026 the Turkish Grand National Assembly (TBMM) passed the omnibus tax bill that adds a new article to Income Tax Law No. 193, granting a full two-decade exemption from Turkish income tax on every cent of foreign-source income and capital gains for qualifying new residents. The law takes effect the moment it is published in the Resmî Gazete, which follows a presidential signature.

ANKARA, Turkey. 25 May 2026

The bill, formally the Bazı Kanunlarda Değişiklik Yapılmasına Dair Kanun Teklifi (Bill on Amendments to Certain Laws), was submitted to the TBMM Presidency on 5 May 2026 by AK Party MPs and rolled through committee and floor in just over two weeks. The 20-year exemption is the headline retail incentive in a broader package that also drops corporate tax for exporters as low as 9%, opens a wealth-repatriation amnesty, and extends Istanbul Finance Center tax sweeteners to 2047.

What the Turkey 20-year tax holiday actually does

The new statute is short and surgical. Inserted into Income Tax Law No. 193 as a stand-alone article, it provides that natural persons deemed settled in Turkey are exempt from Turkish income tax on income and gains earned outside Turkey for 20 years, provided that they had no Turkish domicile and no Turkish tax liability in the three calendar years immediately before their settlement date.

The mechanics, per the TBMM bill text, are unusually clean. No annual return for the exempt income. It is excluded from any return filed on Turkey-source income. Related expenses cannot be deducted. Foreign tax paid on the exempt income cannot be credited, which does not bite since the income is exempt anyway.

Pre-existing low-level Turkish exposure does not disqualify. The bill explicitly carves out that prior Turkish liability for real-estate rental income, securities income, or capital gains alone does not block the Turkey 20-year tax holiday.

Who qualifies for the Turkey 20-year tax holiday

The eligibility test is binary. If you had Turkish domicile and tax liability in 2023, 2024, or 2025, you are out. If not, you are in once you become a Turkish tax resident from 1 January 2026 onward. No minimum investment, no language test, no nationality bar.

The wider tax package, and why it matters

The Turkey 20-year tax holiday rides on a bigger bill that re-engineers several pieces of Turkish tax law in one stroke. Anyone considering Turkey for relocation, holding structure, or family-office migration should understand the full package, not just the headline article.

The wealth amnesty (varlık barışı) lets persons declare and repatriate foreign cash, gold, FX, and securities by 31 July 2027. The rate scales by lock-up: 0% if held in time deposits or Treasury debt for five years, 1% for four years, 2% for three, 3% for two, 4% for one, and 5% with no commitment. Declarations from 1 January 2027 incur a half-point bump on each tier.

Corporate tax for exporters drops sharply. The 25% general rate falls to 9% on income from manufacturers exporting their own goods, and to 14% on income of other exporters. Transit-trade income (goods bought and sold abroad without entering Turkey) gets a 95% reduction (100% inside the Istanbul Finance Center). The IFC’s 100% corporate-tax exemption is extended through 2047, and the financial-activity fee exemption for IFC participants stretches from five years to twenty.

How Turkey now compares for Plan B residency

Most European tax-friendly regimes have moved the wrong way. Portugal’s NHR closed in 2024 and its successor has been tightened. Italy’s flat tax jumped to EUR 300,000 a year for new arrivals from 1 January 2026, plus EUR 50,000 per family member. Spain’s Beckham Law does exempt foreign-source income, but only for six years (year of arrival plus five) and only for arrivals who pass a five-year prior-non-residence test. The UAE has zero personal income tax already, but taxes corporate income at 9% above AED 375,000.

Turkey beats every one of them on duration. Zero Turkish tax on foreign-source income for two full decades, no annual flat fee, and a three-year prior-non-residence test instead of five. Paired with an existing Turkish residency or citizenship route, that is a fast, legal relocation play built on a fresh act of parliament.

The catch is the same catch every territorial regime carries. The Turkey 20-year tax holiday does nothing to relieve US citizens of their worldwide IRS obligations. Americans considering this should run the renunciation calculus separately, including the IRC §877A exit tax (the renunciation fee itself was just cut to $450), before treating Turkey as a tax solution rather than a residency upgrade. For everyone else, the math is much friendlier.

Bottom line: Turkey is moving in the opposite direction to the rest of the developed world on personal tax. Where most European regimes are tightening, raising flat-tax floors, or shutting golden visa routes, Turkey just passed the most aggressive legal foreign-income exemption in the G20. Liberty Mundo’s full breakdown of the Turkey territorial tax framework covers the structural details, and our wider residency strategies and tax planning coverage compares the alternatives. Anyone with a serious foreign-income profile should be running the Turkey numbers this week.