Türkiye’s 20-Year Foreign-Income Exemption: Conditions, Benefits, and Limitations

Law No. 7582 of 2026 provides a 20-year exemption for foreign income earned by a defined category of individuals who move their residence to Türkiye.

This exemption is not a general rule covering every person residing in Türkiye or every amount coming from abroad. Rather, it is tied to conditions concerning the income recipient and their previous tax-residence status.

Who can benefit from the exemption?

According to the approved information available, an individual must:

• Not have been tax-resident in Türkiye during the previous three years.
• Have subsequently moved their residence to Türkiye.

Accordingly, the date of relocation and the individual’s tax status during the previous three years are essential factors when assessing whether the exemption applies.

What benefit does the law provide?

The principal benefit is a long exemption period of 20 years for qualifying foreign income earned by individuals who meet the applicable conditions.

This benefit may be important for businesspeople and individuals who have income sources outside Türkiye and are considering moving their residence there. However, the nature of each source of income and the circumstances of its recipient must be examined before relying on the exemption for any tax or investment decision.

What limitations should be considered?

The most important limitation is that the exemption does not extend to profits earned by a company from its activities inside Türkiye. If a company conducts local business in Türkiye, the profits from that activity do not become exempt merely because the company’s owner is foreign or personally benefits from the foreign-income exemption.

The approved information is also insufficient to conclude that:

• Every amount coming from abroad qualifies as foreign income covered by the exemption.
• Merely transferring funds to a bank account in Türkiye automatically triggers the exemption.
• Establishing a company in Türkiyeautomatically grants the foreign shareholder the exemption.
• An exemption granted to an individual transfers to the company they own or manage.

It is therefore necessary to distinguish between the individual’s tax position and the company’s tax obligations.

What might brief headlines about the law omit?

When the phrase “20-year exemption” is circulated, certain important boundaries may not be immediately clear, including:

• The exemption is intended for a category of individuals who meet a prior non-tax-residence condition in Türkiye.
• The previous three-year period is a central element in determining eligibility.
• Moving one’s residence to Türkiye is part of the eligibility conditions.
• The exemption concerns foreign income, not every type of money or asset held outside Türkiye without distinction.
• Profits from business activities conducted by a company inside Türkiye are not covered by this exemption.

These points are not criticisms of the law. They clarify the distinction between the announced benefit and its actual scope of application.

Do foreign-owned companies benefit from the exemption?

The 20-year exemption concerns individuals who meet the stated conditions. It is not a general exemption for company profits.

Companies wholly owned by foreigners are, in principle, eligible for the same incentives available to local companies under Foreign Direct Investment Law No. 4875. This is separate from the foreign-income exemption granted to individuals under Law No. 7582.

What should be reviewed before relying on the exemption?

Before moving to Türkiye,establishing a company in Türkiye as a foreigner, or arranging foreign income sources, the following should be reviewed:

• The individual’s tax-residence status during the previous three years.
• The date on which the individual actually moved their residence to Türkiye.
• The nature, source, and documentation of the income.
• The distinction between personal foreign income and company profits from activities conducted inside Türkiye.
• The official text of the law, the article governing the exemption, and its publication date in the Official Gazette.

Law number and publication date

The approved information confirms Law No. 7582, the year 2026, the 20-year exemption period, and the requirement that the individual was not tax-resident in Türkiye during the previous three years.

However, the specific article governing the exemption and its official publication date in the Official Gazette are not available in the approved sources for this article. An unverified article number or publication date should therefore not be included. These details must be confirmed against the official text before being used in a contract, tax memorandum, or investment decision.

Conclusion

Law No. 7582 of 2026 provides a 20-year foreign-income exemption for a defined category of individuals who were not tax-resident in Türkiye during the previous three years and subsequently moved their residence there.

The benefit is significant, but it is not a general exemption for all funds coming from abroad, nor does it automatically cover the profits of a company conducting business in Türkiye. Actual eligibility remains dependent on the individual’s circumstances, the nature of the income, and a review of the law’s official text.

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