Under Law No. 7582, published in the Official Gazette dated June 4, 2026 (No. 33270), Repeated Article 20/D was added to the Income Tax Law, granting individuals who settle in Turkey a 20-year income tax exemption on their foreign-sourced income. Viewed alongside the Asset Peace regulation we covered earlier, this exemption presents a significant opportunity for expatriates planning to settle in Turkey and individuals earning income abroad. In this article, we summarize who qualifies, the scope of the exemption, and the points to watch for.
İçindekiler
Who Qualifies for the Exemption?
To benefit from the Repeated Article 20/D exemption, three conditions must be met together:
- Deemed resident of Turkey: under Article 4 of the Income Tax Law, a person is deemed resident in Turkey if their domicile is in Turkey, or if they reside continuously in Turkey for more than 6 months within a calendar year.
- No domicile in Turkey for the preceding 3 calendar years: the individual must not have had a domicile in Turkey in the three calendar years prior to settling.
- No tax liability in Turkey for the preceding 3 calendar years: during the same period, the individual must not have had continuous tax liability arising from commercial, agricultural, or self-employment income.
For example, an individual settling in Turkey in 2026 must have had no domicile and no continuous tax liability in Turkey during 2023, 2024, and 2025 to qualify for the exemption.
What Does the Exemption Cover?
For individuals meeting the conditions, all types of income and earnings generated outside Turkey are exempt from income tax for 20 years from the date of settlement. Key points:
- The exemption is granted only to individuals; companies (corporate entities) cannot benefit from this regulation.
- There is no requirement to transfer foreign earnings to Turkey; the transfer of funds does not affect eligibility.
- No tax return needs to be filed in Turkey for foreign income covered by the exemption.
What Do You Give Up in Exchange for Not Filing?
The benefit of not filing a return comes with a trade-off: expenses and costs related to the exempt income cannot be deducted against other income, and taxes paid abroad on this income cannot be credited in Turkey. For this reason, whether the exemption is genuinely advantageous should be assessed individually, based on the person’s income structure and their tax burden abroad.
Advantage in Inheritance and Gift Tax
In the event of death during the exemption period, a reduced 1% rate of inheritance and gift tax may apply to assets transferred by inheritance — an additional benefit offered by the regulation.
When Does It Take Effect?
The regulation entered into force on its publication date, applying to individuals deemed resident in Turkey from January 1, 2026 onward; the implementation procedures were set out in General Communiqué No. 333 on Income Tax, published in the Official Gazette dated July 4, 2026 (No. 33300). Repeated Article 20/D has no expiration date — as long as the regulation remains in force, individuals who settle in Turkey in later years can also benefit from their own 20-year exemption period, starting from their individual settlement date, provided they meet the conditions.
A Risk to Be Aware Of
If it is later determined that the eligibility conditions were breached, this creates a risk of a penalized tax assessment. For this reason, it is important to document the settlement date and the individual’s domicile and tax liability status for the preceding three years.
Who Should Pay Attention?
- Turkish citizens who have lived abroad for an extended period and are planning to permanently return to Turkey,
- Foreign nationals earning income abroad who are considering settling in Turkey,
- Remote workers and digital nomads with foreign-sourced investment income or self-employment earnings.
At Mete CPA & Auditing, we support you from planning your settlement process in Turkey to documenting your eligibility for the 20-year exemption. Contact us to review your situation.
