New tax breaks in Turkey: what it means for foreign investors

In May 2026, Turkey enacted Law No. 7582, which is already being called one of the most ambitious tax reforms in decades. The new rules are aimed at attracting foreign capital, wealthy private investors, international businesses and asset owners looking for a stable jurisdiction to structure their investments. In fact, Turkey does not offer individual tax breaks, but a comprehensive system of incentives for those willing to move part of their business, capital or tax residency here.

20 years of tax-free foreign income: One of the most discussed innovations was the new Article 20/D of the Turkish Tax Code.

Under the new rules, individuals who move to Turkey and become tax residents can be exempt from paying Turkish personal income tax on income earned outside Turkey for up to 20 tax years. This covers a wide range of income, including dividends from foreign companies, income from rental of real estate abroad, interest, royalties, capital gains from the sale of foreign assets and other types of investment income. This can be a significant advantage for many international investors. Especially considering that the standard personal income tax rate in Turkey can reach 40%.

Legalization of capital on preferential terms:

Another important element of the reform was the voluntary declaration of foreign assets program. Until July 2027, individuals and legal entities can transfer funds, securities, gold and other assets to Turkey with the use of a special preferential regime. The key advantage of the program is that after proper declaration of assets, the state guarantees the absence of tax audits and claims regarding such assets in the future.

For investors who have been building international asset portfolios for years, this can be a convenient mechanism for capital restructuring and further investments through Turkey. New opportunities for transferring capital to the next generation:

• The law also provides a special regime for inheritance and gifting of property by individuals who benefit from new tax benefits.
• For such investors, the inheritance and gift tax rate may be as low as 1%.
• Against the background of many European countries, where taxes on the transfer of large assets can be significant, this model looks quite attractive for family planning and building long-term family office structures.

Real estate and citizenship of Turkey:

• The combination of new tax incentives with the Turkish citizenship by investment program deserves special attention.
• Today, a foreign investor can purchase real estate for an amount of $ 400,000 and apply for Turkish citizenship for himself and his family members.
• At the same time, the legislation does not require permanent residence in the country to maintain citizenship, and the procedure itself usually takes several months.
• The combination of citizenship through investment and new tax benefits makes Turkey particularly interesting for international investors planning a long-term presence in the region.

Benefits for international business:

• Law No. 7582 also contains a number of incentives for companies.
• In particular, for the so-called qualified service centers that provide services to international groups of companies and work with clients in several countries, a deduction of up to 95% of the profit from the tax base is provided.
• For certain structures operating in the Istanbul Financial Center or special economic zones, the amount of the benefit can reach 100%.
• In fact, this allows for a significant reduction in the effective tax burden on international business.

Turkey is betting on production:

• Another direction of the reform was support for the manufacturing sector.
• Starting from 2027, a reduced corporate tax rate of 12.5% ​​is provided for companies that have the appropriate production permits and carry out real production activities in Turkey.
• Against the background of the general corporate tax rate, this creates additional incentives for international manufacturing companies that are considering transferring part of their operations to Turkey.
• The new tax incentive package demonstrates Turkey's desire to compete for international capital not only due to a large domestic market or a favorable geographical location.
• The country actually offers investors a comprehensive model: the possibility of legalizing assets, obtaining tax benefits, investing in real estate, obtaining citizenship and creating international corporate structures in one jurisdiction.

That is why many investors are already considering Turkey not only as a destination for purchasing real estate, but also as a full-fledged center for international tax and corporate planning.

The Antwort Law team accompanies foreign investors at all stages of working with Turkey - from analyzing tax opportunities to obtaining citizenship and starting a business. We help structure capital, assess the possibility of using establishment of new tax benefits, we support real estate investments, corporate structure creation and tax residency issues. If you are considering Turkey as a jurisdiction for investment, relocation or international business structuring, contact the Antwort Law team. We will analyze your situation and offer the best solution taking into account your goals and available tax opportunities.

Lidia Ivanova

International lawyer
Antwort Law