Türkiye Proposes 20-Year Tax-Free Foreign Income Regime

Türkiye has introduced a proposal that could significantly change its position in the global investment and residency landscape.

According to official sources, President Recep Tayyip Erdoğan announced a new incentive package that includes a 20-year exemption from Turkish tax on foreign-source income and capital gains for qualifying new residents.

The proposal is part of a broader effort to attract international capital and position Türkiye as a more competitive destination for globally mobile investors.

Zero Tax on Foreign Income for 20 Years

Under the proposed framework, individuals who have not been tax residents in Türkiye for at least three years could relocate and benefit from a full exemption on foreign income.

This means income generated outside Türkiye would not be subject to Turkish taxation for a period of 20 years.

Domestic income earned within the country would still be taxed under standard rules.

Positioning Against Global Tax Regimes

If approved, the proposed regime would exceed the duration of similar programs in Europe.

For comparison:

• Italy offers a 15-year regime with a fixed annual tax
• Greece provides a similar 15-year structure
• Portugal’s updated system applies for 10 years

Türkiye’s proposal not only extends the duration but also removes fixed annual tax charges on foreign income, making it one of the more aggressive incentives currently under consideration.

Potential Impact on Investors

The proposal introduces a new layer of planning opportunities for international investors, particularly those seeking to separate where they generate income from where they are taxed.

It could also strengthen Türkiye’s appeal when combined with its existing citizenship by investment program, which currently does not offer a dedicated foreign income exemption.

However, the measure is still at the proposal stage and requires parliamentary approval before it can be implemented.

Part of a Broader Incentive Package

The tax exemption is one component of a wider set of economic measures.

These include reduced corporate tax rates for exporters and additional incentives for companies operating within the Istanbul Financial Centre.

The overall strategy reflects Türkiye’s aim to attract capital, businesses, and high-net-worth individuals in a more competitive global environment.