Turkey’s 20-Year Foreign Income Tax Exemption for New Residents

The exemption was introduced through Law No. 7582 and is regulated in detail by Income Tax General Communiqué No. 333, published on 4 July 2026. It applies to qualifying natural persons who are treated as resident taxpayers in Turkey from 1 January 2026 onward.

It does not exempt Turkish-source income, does not apply to companies and should not be interpreted as an automatic “zero-tax” residence programme. The decisive questions are whether the individual satisfies the three-year lookback condition, applies on time and can demonstrate that the relevant income is genuinely foreign-source.

The Exemption at a Glance

Who Can Qualify?

The exemption is available only to individuals. A company, partnership or other legal entity cannot obtain the benefit under this provision.

An applicant must generally satisfy all of the following conditions:

• be treated as a resident taxpayer in Turkey when applying;
• have become resident in Turkey on or after 1 January 2026;
• have had no domicile in Turkey during the previous three calendar years;
• have had no disqualifying Turkish tax liability during those three years;
• submit the application within the prescribed period; and
• obtain the certificate for income and gains derived abroad.

Nationality is not the deciding factor. The rules may cover a foreign national moving to Turkey for the first time or a Turkish citizen returning after living abroad, provided the tax residence and lookback requirements are met.

Individuals assessing whether they have become resident taxpayers should first review the broader principles explained in our Income Tax in Turkey guide.

Which Foreign Income May Be Exempt?

The exemption can cover different categories of income, but each item must first qualify as foreign-source under Turkish tax law. Potentially covered categories include:

• rent from real estate situated outside Turkey;
• dividends or profit shares received from foreign companies;
• interest earned from foreign bank accounts or debt instruments;
• income from foreign securities and investment funds;
• gains from disposing of assets situated or issued abroad; and
• foreign business or professional income where the activity is also determined to be foreign-source.

The foreign location of a client, bank account or payment platform is not conclusive by itself. The underlying asset, company, activity and place where the service is performed must be examined.

Which Income Remains Taxable in Turkey?

The following income generally remains outside the exemption:

• rent from real estate located in Turkey;
• dividends distributed by a Turkish company;
• salary attributable to employment performed in Turkey;
• commercial income from business activities carried on in Turkey;
• professional or freelance services physically performed in Turkey; and
• capital gains or investment income classified as Turkish-source.

For a broader overview of income, business and investment taxation, see Taxes in Turkey for Foreigners.

Application Deadline and Exemption Certificate

The exemption is not obtained merely by becoming resident in Turkey. The applicant must request the Yurt Dışından Elde Edilen Kazanç ve İratlar İçin İstisna Belgesi from the competent tax office.

The general application deadline is the end of the calendar year in which the individual becomes a resident taxpayer. A special extension applies when residence begins during the final two months of the year: the application may be submitted by the end of the second month of the following calendar year.

The tax office may request documents supporting identity, residence history, entry and exit dates, previous foreign residence, prior Turkish tax status and the source of the relevant income. The precise evidence can vary according to the applicant’s circumstances.

Tax Returns, Expenses and Foreign Tax Credits

Foreign-source income covered by the exemption is not included in a Turkish annual income tax return. If the person files a return for other taxable income, the exempt income is excluded from that return.

The exemption also produces two important limitations:

• expenses and costs connected with exempt foreign income cannot be deducted from taxable Turkish income; and
• foreign tax paid on the exempt income cannot be credited against Turkish income tax.

The exemption affects Turkish income tax only. The foreign country may continue to tax the income under its domestic law, and tax treaty obligations, reporting duties or withholding taxes may still apply.

Does Bringing the Money to Turkey Cancel the Exemption?

Transferring money to a Turkish bank account does not, by itself, determine whether the income is Turkish-source or foreign-source. The nature and source of the underlying income remain decisive.

Applicants should nevertheless retain bank statements, contracts, dividend resolutions, property records, portfolio statements and foreign tax documents. These records can help distinguish exempt income from capital transfers, loans and taxable Turkish-source receipts.

Common Mistakes

Pre-Arrival Planning Checklist

1. Determine the expected date on which Turkish tax residence may begin.
2. Review residence and Turkish tax records for the previous three calendar years.
3. Prepare an inventory of Turkish-source and foreign-source income.
4. Identify services that will be physically performed after moving to Turkey.
5. Collect foreign tax residence certificates, returns and supporting records.
6. Model any foreign withholding tax that will remain payable without a Turkish tax credit.
7. Prepare the exemption certificate application before the deadline.
8. Maintain separate records for exempt income and taxable Turkish income.

Our Strategic Tax Planning Services in Turkey help internationally mobile individuals review residence timing, prior tax history, income sourcing and certificate requirements before relying on the exemption.

Official Sources

• Turkish Revenue Administration: Income Tax General Communiqué No. 333
• Turkish Revenue Administration: Consolidated Income Tax Law
• Official Gazette of the Republic of Türkiye

Last reviewed: 7 August 2026. This article provides general information and does not constitute tax or legal advice. Eligibility and income-source classification must be assessed according to the applicant’s individual circumstances and current legislation.