Turkey has announced a sweeping new economic incentive package designed to attract foreign investment, internationally mobile individuals, exporters, and multinational businesses. The proposed reforms include a 20-year exemption from Turkish tax on foreign-source income and capital gains, reduced corporate tax rates, export tax incentives, and expanded benefits linked to the Istanbul Financial Center (IFC).
President Recep Tayyip Erdoğan first presented the measures during an investment event in Istanbul, describing the package as a “radical step” intended to make Turkey a global center of attraction. Finance Minister Mehmet Şimşek later confirmed further details, emphasizing that the reforms are long-term and aimed at boosting competitiveness.
20-Year Tax Exemption for New Foreign Residents in Turkey
The most headline-grabbing proposal is a new tax regime for incoming foreign residents and returning internationally mobile individuals.
Under the draft plan, individuals who have not been Turkish tax residents for at least three years could relocate to Turkey and benefit from:
- 20-year exemption from Turkish tax on foreign-source income
- 20-year exemption from tax on foreign capital gains
- Taxation only on Turkish-source income
- 1% inheritance and gift tax for qualifying individuals
If approved, this would create one of the most competitive personal tax residency regimes in Europe, the Middle East, and surrounding regions.
Turkey vs Italy, Greece and Portugal Tax Residency Programs
Turkey’s proposed tax package compares favorably with existing European regimes.
Italy
Italy currently offers a lump-sum tax regime for new residents lasting 15 years, with an annual fixed tax charge recently increased to €300,000.
Greece
Greece offers a non-dom regime lasting 15 years with an annual fixed tax charge of €100,000.
Portugal
Portugal’s replacement for the Non-Habitual Resident (NHR) regime, known as the IFICI program, provides tax incentives for 10 years.
Turkey’s Competitive Edge
If enacted, Turkey’s regime would offer:
- Longer duration than Italy and Greece
- Double the duration of Portugal’s IFICI regime
- No announced annual lump-sum tax on foreign income
- Strategic access between Europe, Asia, and the Middle East
Corporate Tax Cuts for Exporters and Foreign Investors
Turkey’s package is not limited to personal taxation. It also introduces significant corporate incentives.
9% Corporate Tax Rate for Manufacturing Exporters
Turkey plans to reduce the corporate tax rate for manufacturing exporters from the standard 25% rate to 9%.
14% Corporate Tax for Other Exporters
Other exporting companies would benefit from a 14% corporate tax rate.
100% Tax Exemption on Service Exports
Turkey will also extend a tax exemption on service exports to 100%, targeting high-value sectors such as:
- Software
- Gaming
- Medical tourism
- Professional and digital services
These measures are designed to improve export competitiveness and attract foreign direct investment (FDI).
Istanbul Financial Center Incentives
Turkey is also strengthening the position of the Istanbul Financial Center (IFC) as a regional financial hub.
Transit Trade Tax Exemptions
The package includes:
- 0% corporate income tax on transit trade for companies located within the IFC
- 95% exemption for qualifying companies located outside the IFC
Regional Headquarters Incentives
Regional headquarters managed from Turkey could also benefit from 95% to 100% tax exemptions for up to 20 years.
These incentives are aimed at attracting multinational companies seeking a strategic operational base.
Repatriation of Foreign Assets
President Erdoğan also signaled plans to allow Turkish citizens and companies to repatriate foreign-held assets such as:
- Cash
- Gold
- Securities
- Offshore financial holdings
The proposal would apply reduced tax rates to encourage capital returning to Turkey.
Why Turkey Is Launching These Incentives Now
Turkey’s announcement comes as the government seeks to strengthen the economy following years of high inflation and currency depreciation. Annual inflation remained above 30% recently, affecting household and business purchasing power.
Officials also want to capitalize on shifting regional dynamics and strengthen Turkey’s position as a stable commercial and financial base.
Finance Minister Şimşek said the package aims to:
- Increase exports of goods and services
- Attract talent, entrepreneurs, and foreign capital
- Encourage businesses to use Turkey as a base of operations
- Position Istanbul as a leading regional financial gateway
Will the New Turkey Tax Incentives Become Law?
The package still requires parliamentary approval, and final implementation details have not yet been published.
Key issues investors and advisers will monitor include:
- Eligibility criteria for new residents
- Whether citizenship-by-investment applicants qualify
- Start date of the incentives
- Final tax wording and anti-abuse rules
- Scope of corporate exemptions
If passed, Turkey’s proposed reforms could become one of the most competitive tax and investment packages in the region. Combining a 20-year foreign income tax exemption, low corporate tax rates, export incentives, and IFC benefits, Turkey is clearly signaling ambitions to become a major destination for capital, talent, and international business.
For globally mobile individuals, family offices, exporters, and multinational companies, Turkey may soon become one of the most closely watched jurisdictions in 2026.
FAQ – Turkey’s New Tax Incentive Package
No. The proposal still requires parliamentary approval and final legislation before it becomes effective.
Based on current announcements, individuals who have not been Turkish tax residents for at least three years may qualify. Final eligibility rules are still pending.
If approved as announced, qualifying individuals would pay no Turkish tax on foreign-source income and foreign capital gains for 20 years.
Yes. Income generated within Turkey would remain subject to Turkish tax rules.
Turkey’s proposed regime would offer a longer duration than Italy and Greece, and double the duration of Portugal’s IFICI program.
Qualifying individuals may benefit from a flat 1% inheritance and gift tax, subject to final legislation.
Turkey announced:
- 9% corporate tax for manufacturing exporters
- 14% corporate tax for other exporters
- 100% tax exemption for certain service exports
- Transit trade exemptions linked to the IFC
The Istanbul Financial Center is Turkey’s flagship financial district designed to attract banks, financial institutions, and multinational companies.
Possibly, but this depends entirely on the final legal wording once enacted.
No official implementation date has yet been announced.