24 July 2026
This is a complete legal guide to Turkey's 2026 tax reforms under Laws No. 7582 and 7577: the asset amnesty at 0 to 5 percent, the 20 year foreign income exemption, the 1 percent inheritance rate, Qualified Service Centres, and the transit trade deduction, together with the deadlines, the conditions, and the points that remain unclear.
Turkey enacted the most significant package of tax incentives for internationally mobile individuals and multinational groups in recent memory. Law No. 7582 was published in Official Gazette No. 33270 on 4 June 2026 and entered into force the same day. The implementing communiques that make the regime operational followed on 4 July 2026 in Official Gazette No. 33300.
For individuals, the package offers a 20 year income tax exemption on foreign source income for people who become Turkish tax residents without having been resident or tax liable in Turkey during the preceding three calendar years, together with a flat 1 percent inheritance tax rate during that same 20 year window.
For companies and asset holders, it offers an asset amnesty allowing cash, gold, foreign currency and securities to be brought into the formal system at rates between 0 and 5 percent until 31 July 2027, a 95 to 100 percent corporate tax deduction on transit trade profits, and a new corporate category called the Qualified Service Centre carrying a 95 to 100 percent deduction on qualified foreign source profits for twenty accounting periods.
Every one of these regimes is conditional. None of them is automatic. The deadlines are strict, the evidentiary burdens are real, and several important procedural questions remain unanswered by the authorities as at the date of this guide. This article sets out what the law says, what the communiques added, what they left open, and what that means in practice.
The package did not arrive in a single instrument. Understanding the sequence matters, because different components carry different effective dates.
Law No. 7577 on Amendments to Certain Laws was published on 2 April 2026 and made changes to the Corporate Tax Law relating to free zones and foundation university health institutions.
Law No. 7582 on Amendments to Certain Laws was accepted on 21 May 2026 and published in Official Gazette No. 33270 on 4 June 2026. This is the principal instrument. It inserted Provisional Article 19 into the Corporate Tax Law No. 5520 (the asset amnesty), added Additional Article 20/D to the Income Tax Law No. 193 (the 20 year exemption), amended the Inheritance and Gift Tax Law No. 7338 (the 1 percent rate), added sub-paragraphs (i) and (j) to Article 10 of the Corporate Tax Law (transit trade and Qualified Service Centre deductions), amended Article 32 of the Corporate Tax Law (reduced rates), and added Additional Article 1 to the Direct Foreign Investments Law No. 4875 (the Qualified Service Centre definition).
On 4 July 2026, Official Gazette No. 33300 published the implementing communiques: the General Communique on Bringing Certain Assets into the Economy (Serial No. 1), the communique on the wage exemption for personnel employed at Qualified Service Centres, and the Communique Amending the Corporate Tax General Communique (Serial No. 1), Serial No. 26.
| Regime | Legal Basis | Effective From |
|---|---|---|
| Asset amnesty | CTL Provisional Art. 19 | 4 June 2026; notification window to 31 July 2027 |
| 20 year foreign income exemption | ITL Additional Art. 20/D | Applies to persons deemed resident in Turkey from 1 January 2026 |
| 1 percent inheritance rate | Inheritance and Gift Tax Law No. 7338 | 4 June 2026, for transfers within the 20 year exemption period |
| Transit trade deduction | CTL Art. 10/1(i) | Returns due from 1 July 2026, for periods beginning 1 January 2026 |
| Qualified Service Centre deduction | CTL Art. 10/1(j) | Returns due from 1 July 2026, for periods beginning 1 January 2026 |
| QSC wage exemption | ITL Art. 23/1(20) | 4 June 2026 |
| Manufacturing rate at 12.5 percent | CTL Art. 32/8 | Profits derived in 2027 and subsequent periods |
| IFC incentive extension | Law No. 7412 | 4 June 2026 |
Additional Article 20/D of the Income Tax Law exempts from Turkish income tax, for twenty full calendar years, all income and revenues derived from outside Turkey by natural persons who become Turkish tax residents, provided they had neither a domicile nor an income tax liability in Turkey during the three calendar years preceding the year in which they are deemed to have settled in Turkey.
The exemption commences on the date the person becomes a full taxpayer in Turkey, meaning the date on which they are deemed to have settled in Turkey under Article 4 of the Income Tax Law, and continues for twenty full calendar years from that point.
No annual return is filed for the exempt income. Where the person files a return for other income, the exempt foreign source income is not included in it.
The regime is directed at three broad populations.
Turkish citizens living abroad who have not been registered as Turkish taxpayers for at least the last three calendar years. This includes long established communities in Germany, the Netherlands, the United Kingdom, the United States and the Gulf states.
Foreign nationals considering residence or citizenship in Turkey who satisfy the non-liability condition. This population overlaps directly with Turkey's citizenship by investment programme.
Returning entrepreneurs and high net worth individuals whose primary income sources remain abroad, including dividends from foreign holdings, foreign rental income, capital gains, royalties and foreign pension distributions.
The scope is broader than most first-time readers assume. Based on the text of Additional Article 20/D and established Turkish tax principles, the exemption covers employment income for work performed outside Turkey, dividends and interest from foreign companies or foreign bank accounts, capital gains from foreign listed securities, foreign real property or shares in foreign companies, rental income from property located abroad, pension and retirement distributions from foreign schemes, and royalty and intellectual property income arising outside Turkey.
Turkish source income remains fully taxable under ordinary rules. A salary from a Turkish employer, profits of a company registered in Turkey, and rental income from property in Istanbul or Antalya all continue to be taxed normally.
Prior Turkish tax liability arising solely from rental income, capital income or capital gains does not prevent a person from benefiting from the exemption. This is expressly stated in the legislation. A Turkish annual return filed years ago for rental income from an apartment in Turkey does not by itself close the door.
What does disqualify is having been registered as a full Turkish taxpayer during the relevant three year window. Employment income, commercial income or self-employment income during those three years is disqualifying.
Article 4 of the Income Tax Law treats continuous presence in Turkey exceeding six months within a calendar year as grounds for residency. For a person who has spent extended periods in Turkey while maintaining a life abroad, this threshold may have been crossed in earlier years without any deliberate decision to become resident.
The practical consequence is that the three year test is documentary. Travel history, address registrations, residence permit records and income declarations for the relevant period become the foundation of any application. In our experience the assessment of these records is where a matter is either straightforward or difficult, and it is best done before relocation rather than after.
Additional Article 20/D turns on tax residency, not on nationality. A Turkish citizen who has lived in Germany for thirty years is not a Turkish tax resident, and their Turkish passport does not open the exemption. Conversely, a foreign national who has never held Turkish citizenship can access the exemption by becoming a Turkish tax resident, provided the preceding three years are clean.
For a person who acquires Turkish citizenship by investment, the path is often clear precisely because they were unlikely to have been a Turkish tax resident before the investment.
Article 2 of Law No. 7582 amended the Inheritance and Gift Tax Law No. 7338 to provide that, for persons benefiting from the Additional Article 20/D income tax exemption, transfers of property by inheritance occurring within the 20 year exemption period are taxed at a flat rate of 1 percent instead of the ordinary progressive rates.
Turkey's standard inheritance and gift tax operates on a progressive tariff that can reach into double digits on larger estates. For a family holding substantial assets, the availability of a 1 percent rate during a two decade window changes multigenerational planning arithmetic materially.
This provision deserves more attention than it has generally received. It is a statutory rate, not an administrative concession, and it is tied directly to eligibility under Additional Article 20/D. Wills drafted on the assumption of standard Turkish inheritance taxation, trust structures established abroad specifically to avoid Turkish inheritance exposure, and estate plans spanning multiple jurisdictions may all merit review in light of it.
Provisional Article 19 of the Corporate Tax Law, together with the General Communique on Bringing Certain Assets into the Economy (Serial No. 1), permits money, gold, foreign currency, securities and other capital market instruments to be brought into the formal system on payment of a defined tax.
The regime covers four distinct situations: bringing assets held abroad by real and legal persons into the national economy and recording them in statutory books; notifying and registering assets located in Turkey but absent from the statutory books of income or corporate taxpayers; notification of assets located in Turkey by persons with no income or corporate tax liability; and other matters relating to the application of Provisional Article 19.
Immovable property, vehicles, commodities and receivables are not directly within scope. However, a foreign asset outside the scope may be converted into an in-scope asset and brought to Turkey by 31 July 2027.
The standard rate is 5 percent. Where the notified assets are committed to time deposit accounts, government domestic debt securities issued under Law No. 4749, lease certificates or venture capital investment funds, the rate reduces according to the committed holding period.
| Committed Holding Period | 2026 Notification Rate | Rate for 1 January to 31 July 2027 |
|---|---|---|
| No commitment | 5 percent | 5 percent |
| At least 1 year | 4 percent | 4.5 percent |
| At least 2 years | 3 percent | 3.5 percent |
| At least 3 years | 2 percent | 2.5 percent |
| At least 4 years | 1 percent | 1.5 percent |
| At least 5 years | 0 percent | 0.5 percent |
To obtain a reduced rate, the Annex 2 undertaking must be submitted at the time of the notification. It cannot be added afterwards. Where the notification period is extended by presidential decree, notifications made in that extension period attract a further half point, bringing the total increase to one point above the base rates. Even where the rate is 0 percent, the notification must still be included in the Annex 3 return.
Notifications are made to a bank or, for securities and other capital market instruments, an intermediary institution. They are not made to a tax office. The form is Annex 1. The window runs from 4 June 2026 to 31 July 2027 inclusive.
Each calendar month in which a notification is made is treated as a separate taxation period. This means the regime is not a single-shot opportunity: multiple notifications may be filed across different months until the deadline.
For assets held abroad, the assets must be transferred to an account at a bank or intermediary institution in Turkey within two months of the notification date. Where assets are brought physically, customs procedures must be completed within the same two month window and the assets deposited by the end of the first business day following completion of customs clearance.
For assets located in Turkey held by persons without tax liability, the assets must be deposited into an account as of the notification date and this must be evidenced with supporting documents.
The tax is collected in advance by the bank or intermediary institution and declared and paid using the Annex 3 return by the evening of the 15th day of the month following the notification.
Where an undertaking has been given, the notified amounts must be converted into the committed instrument within ten days of the transfer or deposit date for foreign assets, or of the notification date for domestic assets.
The communique sets out a precise framework for corrections that repays close reading.
| Situation | Rule |
|---|---|
| Within the same month | The initial notification is corrected. On a downward correction the corresponding portion of the tax paid may be refunded |
| Later months, decrease | Correction of the earlier notification, provided the two month repatriation window is not exceeded, via the Annex 3 return |
| After transfer or deposit | Correction and refund are not possible |
| Later months, increase | No correction; a new notification is filed for the additional amount only |
| All other notifications | Treated as a new notification, not associated with the earlier one |
| After 31 July 2027 | Correction requests are disregarded |
For taxpayers keeping books, recording the notified assets in the statutory books is mandatory. Taxpayers keeping books on the balance sheet basis must open a special fund account on the liabilities side. Those keeping a self-employment earnings ledger or books on the business account basis must show the notified values separately.
The special fund account is treated as a component of capital. It cannot be withdrawn from the business before two years have elapsed from the notification date and cannot be used for any purpose other than addition to capital. On liquidation these amounts are not taxed, and they are likewise not taxed in transfers and demergers under Articles 19 and 20 of the Corporate Tax Law or Article 81 of the Income Tax Law.
The standard entries are as follows. On taking the asset in, the relevant balance sheet asset account (102, 108, 111 and similar) is debited and account 549 Special Funds is credited. On payment of the tax, account 689 Other Extraordinary Expenses and Losses is debited as a non-deductible expense and account 102 Banks is credited.
This is the point most frequently overstated in general commentary.
Provided the conditions are met, no tax inspection and no tax assessment may be made in respect of amounts corresponding to the notified assets. Where an inspection commenced for another reason identifies a base difference, and it is established that the difference derives from the notified assets, no assessment is made up to the notified amount. Where the base difference exceeds the notified amount, assessment is made only on the excess.
The protection is therefore limited in two ways. It extends only to amounts corresponding to the notified assets, and it requires that a causal link between the base difference and the notified assets can be established.
Notifications made after a tax inspection has commenced or after referral to the appraisal commission do not provide this protection, and the notified amounts cannot be offset. There is a narrow exception: where the matter has come to the knowledge of the tax office or those authorised to inspect, but the notification is filed before the inspection or referral, the provision may still be relied upon.
The protection is also lost where the assets are not brought to Turkey within two months, where the tax is not paid on time, where the undertaking is breached, or where the fund account conditions are not observed.
Article 8 of the communique addresses a recurring commercial reality. Legal representatives or partners of companies, or persons authorised to deal with in-scope assets on behalf of a company or its partners under a power of attorney or representation agreement issued before 4 June 2026, may notify those assets in the company's name.
Assets belonging to a company or its partners but held by persons other than the legal representatives, partners or proxies may also be notified in the company's name. Assets belonging to real persons but held by foreign companies in which those persons are partners or legal representatives may be notified in the name of those individuals.
The critical qualification is that during any inspection carried out for reasons other than the notification, it must be proven that these assets belong to the company, the partner or the individual concerned. The date of the power of attorney is decisive: documents created after 4 June 2026 cannot be relied upon for this purpose.
Losses arising from the subsequent disposal of notified assets are not accepted as an expense or deduction in determining income or corporate profit. Gains and revenues from holding or disposing of those assets are taxed under ordinary rules.
Taxes paid by reason of the notification cannot in any way be recorded as an expense and cannot be offset against any other tax. Exchange differences arising from the revaluation of foreign currencies brought in, and interest income on them, fall outside the exemption and are taxed under general rules.
Notified assets are shown in the line of the corporate tax return for exemptions and deductions available even where a loss exists. Prior year losses cannot be offset against this amount.
Additional Article 1 added to the Direct Foreign Investments Law No. 4875 defined the Qualified Service Centre in Turkish law for the first time. A Qualified Service Centre is a capital company established in Turkey to provide services to a related company or group of companies actively operating in at least three different countries, and deriving at least 80 percent of its annual revenue from services provided to those related companies abroad.
The placement of this definition matters. It sits in direct foreign investment legislation rather than in corporate tax legislation. The corporate qualification is acquired first and the tax regime follows it.
| Test | Requirement | Critical Point |
|---|---|---|
| Corporate form | Turkish capital company, in practice a joint stock or limited liability company | Branches, liaison offices and sole proprietorships are outside the scope |
| Three country test | The related group must be in active operation in at least three different countries outside Turkey | Registered but dormant subsidiaries do not count; genuine commercial activity is required in each country |
| 80 percent revenue test | At least 80 percent of annual revenue must come from related companies abroad | Domestic revenue is capped at 20 percent and the threshold is re-measured at the end of each accounting period |
These three conditions are re-tested at the end of every accounting period, not only at formation. Losing a single condition for one year means losing the entire regime for that year, with a tax loss penalty under the Tax Procedure Law, and it is not automatically regained the following year.
No. The text of the law does not expressly require the shares of the Qualified Service Centre company to be held by a foreign person or entity. What is required is that the entities served are related companies abroad and that the group is active in at least three countries.
The consequences follow logically. A Turkish company with foreign shareholders cannot benefit if it does not meet the other conditions. A capital company with Turkish shareholders is not excluded merely because of its shareholding structure, provided it genuinely satisfies the foreign related group structure and the other conditions. A branch or liaison office of a foreign company, not being a separate Turkish capital company, does not on a prudent reading fall within the definition.
The law enumerates qualifying activities in two groups.
Group (a), management and advisory functions, comprises financial advisory, strategic management advisory, risk management, cash and liquidity management, funding and borrowing transactions, investment and capital structure planning, budgeting, financial reporting and analysis, international accounting and compliance, audit, digital transformation and technology advisory, investment and data analysis, legal advisory, promotion, brand management, human resources and training services.
Group (b), operational coordination functions, comprises coordination and management of sales, after-sales support, technical support, research and development, external procurement, testing of newly developed products and laboratory services.
A specific qualification applies to legal advisory. It may only be obtained from an attorney or attorney partnership entitled to provide services under the Attorneyship Law No. 1136, and advisory relating to domestic activities or Turkish law may only be provided by authorised Turkish attorneys.
Ordinary production, routine sales or call centre activity does not fall within scope by itself. A functional analysis is required.
Employees who directly perform these services, and who are not support personnel, are treated as qualified service personnel. Reception, cleaning and general administrative support staff fall outside the definition. A job title alone is not sufficient; the actual duties performed and the output produced are decisive.
Under Article 10/1(j) of the Corporate Tax Law, 95 percent of the net profit a Qualified Service Centre derives from abroad exclusively within the scope of these activities may be deducted, rising to 100 percent for participants in the Istanbul Financial Centre holding a participant certificate and for companies in industrial zones deemed suitable by the President.
The deduction applies for twenty accounting periods including the period in which the centre commenced operations. Where the first period is a short period, it counts as one full accounting period. No deduction is available for profits derived after the twenty periods have expired.
The calculation runs from eligible revenue, being invoices issued to related companies abroad for the qualifying services, less direct costs, less an allocated share of common expenses determined on a reasonable, consistent and documented allocation key. The resulting net profit is multiplied by 95 or 100 percent.
Interest income from investing cash on hand, exchange differences arising from currency valuation, gains on the disposal of economic assets and extraordinary income are expressly excluded.
Amounts that cannot be deducted in a period because of other deductions, exemptions or prior year losses cannot be carried forward. Where the activity closes with a loss, no deduction applies at all.
Profit derived within the scope of Qualified Service Centre activities must be transferred to Turkey by the date on which the corporate tax return for the relevant accounting period must be filed. Profit not transferred within that period cannot benefit from the deduction even if it is transferred later.
Under Article 23/1(20) of the Income Tax Law, the portion of the wages of qualified service personnel that does not exceed three times the gross minimum wage is exempt from income tax, rising to five times for centres in presidentially designated industrial zones and for centres operating in the Istanbul Financial Centre with a participant certificate.
Using the 2026 gross minimum wage of TRY 33,030, the standard ceiling is TRY 99,090 per month and the enhanced ceiling is TRY 165,150 per month.
Wage for this purpose is defined broadly. In addition to monthly salary it includes premiums, bonuses, overtime, allowances, expense reimbursements and any benefit capable of being represented in money.
The portion above the ceiling is taxed under ordinary rules. A stamp duty exemption applies to the payroll documents relating to the exempt portion, while the excess portion is subject to both income tax and stamp duty.
Personnel already benefiting from the wage exemption under the Istanbul Financial Centre Law No. 7412 cannot additionally benefit from the Article 23/1(20) exemption. Duplicate incentives on the same wage are prohibited.
The President is authorised to determine the three and five multiples, jointly or separately, down to one multiple and up to twice their current level.
Turkey's domestic minimum corporate tax provides a floor that disregards certain exemptions and deductions. Law No. 7582 expressly added both the Qualified Service Centre foreign source profit deduction and the transit trade deduction to the list of deductions that may be deducted from the minimum tax base.
The practical significance is that the 95 to 100 percent deduction is not eroded at the minimum tax layer, meaning the effective corporate tax burden on qualifying profit can genuinely fall towards the range of 0 to 1.25 percent.
Under Article 10/1(i) of the Corporate Tax Law, 95 percent of the net profit derived from selling abroad goods purchased abroad without bringing them into Turkey, or from acting as an intermediary in purchases and sales of goods taking place abroad, may be deducted from corporate profit. The rate rises to 100 percent for Istanbul Financial Centre participants and companies in approved industrial zones.
The profit must be derived from an eligible foreign sale or brokerage activity. In brokerage, both the seller and the buyer must be outside Turkey. The profit must be transferred to Turkey by the corporate tax return filing date for the accounting period in which it was earned. For the 100 percent rate in the Istanbul Financial Centre, a participant certificate is required. For industrial zones, presidential designation of the zone is required.
Revenue, cost and expense items within and outside the scope of the deduction must be tracked separately, and the records must be kept in a manner that ensures this separation.
A company purchases products from a company resident in Germany and sells them to a company resident in France without bringing them to Turkey, earning TRY 1,000,000. With the profit transferred in time and the other conditions met, TRY 950,000 is deductible.
A company acts as intermediary between an Italian seller and an Egyptian buyer, earning brokerage income of TRY 400,000. With neither party located in Turkey, TRY 380,000 is deductible.
A company holding an Istanbul Financial Centre participant certificate purchases from a Japanese firm and sells to a firm in the United Arab Emirates, earning TRY 2,000,000. The entire amount is deductible at 100 percent.
A company brings German goods into a bonded warehouse in Turkey and sells them to a Bulgarian buyer without releasing them into free circulation and without processing, earning TRY 2,000,000. TRY 1,900,000 is deductible at 95 percent.
The bonded warehouse example rewards careful attention because it marks the boundary of the regime.
Goods waiting in a bonded warehouse are not regarded as having entered Turkey and no import tax has been paid. Once customs procedures are completed and the goods enter free circulation, they are regarded as imported and tax has been paid. Goods sold directly from the bonded warehouse to a third country are regarded as never having entered Turkey.
If goods leave the bonded warehouse and enter the Turkish market on payment of import tax, they are no longer goods that were not brought to Turkey, and the transit trade deduction is lost. Sale to a buyer in Turkey or release into free circulation both defeat the deduction.
The communique extends the deduction to activation codes, e-pin codes, game codes, digital product codes, licence codes, subscription codes and similar cards, passwords and codes whose consideration is a specific product or service. The conditions are that their nature and content are not altered, that they are not used or disposed of in Turkey, that they are not sold to persons or institutions in Turkey, and that they are sold on directly to persons or institutions resident abroad in the form purchased.
Excluded are cards, passwords, codes, balances, wallet codes, gift cards and similar values that do not represent a right of access to a specific product or service, but are in the nature of purchasing power or a means of payment.
The deduction also covers copyright, trademarks, patents, utility models, industrial designs, licences, broadcasting rights and similar intangible rights purchased from persons or institutions abroad and sold on directly to persons or institutions abroad in the form acquired, without alteration and without use by anyone resident in Turkey including the purchaser. A critical qualification applies: the seller must retain no right or power of disposal over the intangible right following the sale.
The deduction applies to net profit, being eligible activity revenue less the costs and expenses borne in respect of that activity, not to gross sales. It is shown in the section of the corporate tax return for exemptions and deductions to be deducted where profit exists.
Amounts that cannot be deducted because of other deductions, exemptions or prior year losses cannot be carried forward. Where the activity results in a loss, no deduction arises.
Interest income from investing cash on hand, exchange differences from currency valuation, gains on the sale of fixed assets and extraordinary income fall outside the scope.
Article 32/8 of the Corporate Tax Law now provides that the corporate tax rate is applied at 12.5 percent to profits derived exclusively from manufacturing activities by institutions holding an industrial registry certificate and actually engaged in manufacturing, and to profits derived exclusively from agricultural production activities by institutions engaged in agricultural production.
This applies to profits derived in 2027 and subsequent taxation periods. For the 2026 period, the former one point reduction continues to apply for manufacturers holding an industrial registry certificate.
Agricultural producers must satisfy together the conditions of holding a farmer registration document, food business registration document or business approval document from the Ministry of Agriculture and Forestry, and of being actually engaged in production activity.
Where a taxpayer manufactures in more than one field, profits and losses from manufacturing activities are assessed as a whole. If the aggregate manufacturing result is a loss, the 12.5 point reduction does not apply even where the taxpayer has commercial balance sheet profit and net corporate profit.
The base to which the reduced rate applies is calculated as: tax base multiplied by manufacturing profit divided by commercial balance sheet profit. The resulting amount cannot exceed either the manufacturing profit or the net corporate profit for the period.
Article 32/7 provides a five point reduction on profits derived exclusively from exports. It also applies to profits from export activities carried out by manufacturing or supplying institutions through foreign trade capital companies or sectoral foreign trade companies under an intermediated export agreement.
Where profits benefit from the 12.5 point manufacturing reduction, the five point export reduction is not additionally applied to the same profits. The seventh and eighth paragraphs of Article 32 are assessed as a whole for manufactured products, and a second deduction on the export portion is prohibited.
A worked example from the communique illustrates the point. A bag manufacturer earns TRY 400,000 from domestic sales and TRY 600,000 from exports of the bags it manufactures, totalling TRY 1,000,000. The 12.5 point reduction applies to the entire TRY 1,000,000. No further five point reduction is applied to the TRY 600,000 export portion.
The position differs where a company both manufactures and trades. In the communique's mixed example, a company earns TRY 800,000 from selling construction machinery it manufactured, incurs a TRY 400,000 loss on exporting hardware products it manufactured, and earns TRY 1,000,000 from exporting white goods purchased from another manufacturer. The manufacturing activities net to TRY 400,000 and attract the 12.5 point reduction on the corresponding base portion. The white goods export, being trading rather than manufacturing, attracts the five point export reduction on its own base portion.
Profits from products manufactured using toll services purchased at certain stages may still qualify for the reduced rate, provided five conditions are satisfied together: the toll manufacturing is within the scope of the industrial registry certificate or operating licence; the manufacturing consists principally of the enterprise's own production rather than toll production; the profit benefiting is limited to actual capacity utilisation; the business risk and organisation are assumed; and raw materials and auxiliary materials are procured by the enterprise.
Where manufacturing is essentially carried out through toll manufacturers, or where the taxpayer merely engages in commercial activity without assuming the manufacturing organisation and risk, the resulting profits are not treated as manufacturing profits.
Institutions whose shares are offered to the public at a rate of at least 20 percent for first-time trading on the Borsa Istanbul Equity Market benefit from a two point reduction on the entirety of corporate profits for five accounting periods beginning with the period of the offering.
Where a taxpayer can benefit from the sixth, seventh and eighth paragraphs of Article 32 in the same period, the order of application matters. The two point public offering reduction is applied first, and the 12.5 or five point reduction is calculated afterwards on the resulting rate.
In the communique's example, a company with a 30 percent public offering in 2025 and manufacturing profit in 2027 applies a rate of 23 percent following the two point reduction, and then 10.5 percent on the manufacturing portion of the base after the further 12.5 point reduction.
Articles 12 and 13 of Law No. 7582 amended the Istanbul Financial Centre Law No. 7412 to expand both the scope and the duration of the available advantages.
The application period for the tax advantage on financial activity income has been extended to 2047, and the duty exemption period has been reset at 20 years, up from five.
The category of beneficiaries has been widened. The wording referring to financial institutions holding a participant certificate has been replaced with a reference to participants generally.
The overlapping exemption rule noted above applies: Istanbul Financial Centre personnel benefiting from the wage exemption under Law No. 7412 cannot additionally benefit from the exemption in Article 23/1(20) of the Income Tax Law.
Within the Qualified Service Centre framework, Istanbul Financial Centre participation operates as a rate-enhancing layer rather than an alternative regime. Qualified Service Centre status is independent of physical location and does not require a participant certificate. The participant certificate lifts the corporate deduction from 95 to 100 percent and the wage exemption ceiling from three to five times the minimum wage.
| Feature | QSC Outside the IFC | QSC Within the IFC with Participant Certificate |
|---|---|---|
| Legal basis | Law No. 4875 | Law No. 4875 and Law No. 7412 |
| Corporate tax deduction | 95 percent | 100 percent |
| Personnel income tax exemption | Three times the minimum wage | Five times the minimum wage |
| Location condition | Anywhere in Turkey | Within the IFC Zone in Atasehir |
| Qualification test | Three countries, 80 percent revenue, capital company | Same conditions plus IFC participant authorisation |
| Incentive period | 20 accounting periods from commencement | The same |
Article 11 of Law No. 7582 added provisions to Law No. 5746 on the Support of Research, Development and Design Activities introducing two facilities.
For companies holding a techno-venture badge issued by the Ministry of Industry and Technology that are not publicly held, the provisions of the Turkish Commercial Code on conditional capital increases do not apply to conditional capital increases carried out on the basis of convertible debt agreements. This is directly relevant to technology companies seeking convertible note financing from foreign investors.
Companies established by entrepreneurs qualifying as incubator entrepreneurs under the Technology Development Zones Law No. 4691, and falling within the digital company definition to be determined by the Ministry of Industry and Technology, are exempt from chamber and stock exchange fees and dues for up to three years from establishment.
Separately, Article 3 of Law No. 7582 expanded the wage exemption under Article 17 of the Income Tax Law covering share certificates granted free or at a discount by techno-venture employers to their employees. The exemption ceiling is now the portion of the fair market value of the shares at the date of grant that does not exceed twice the annual gross wage for that year.
The recapture periods on disposal were shortened. Where the shares are disposed of within two full years of acquisition, 100 percent of the exempted tax is recovered from the employer. Between three and four years, 75 percent is recovered. Between five and six years, 25 percent is recovered. In each case late payment interest applies but no tax loss penalty is imposed.
Article 1 of Law No. 7582 amended Article 48 of Law No. 6183 on the Collection Procedure for Public Receivables, expanding the instalment facility available to taxpayers experiencing payment difficulties.
The maximum deferral period was extended from 36 months to 72 months. The debt amount that may be deferred without requiring collateral was set at TRY 1,000,000, raised from TRY 50,000.
The strategic value of the package emerges when the components are planned together rather than in isolation.
The asset amnesty addresses the past. Assets accumulated abroad are brought into the formal system at a rate between 0 and 5 percent, with conditional protection against inspection and assessment for the amounts notified.
The 20 year exemption addresses the future. Once the individual becomes a Turkish tax resident, having satisfied the three year non-liability condition, foreign source income falls outside Turkish income tax for two decades.
The 1 percent inheritance rate addresses the generational transfer. Transfers by inheritance within the exemption period are taxed at 1 percent instead of the progressive tariff.
The corporate regimes address the operating structure. A group establishing a Qualified Service Centre in Turkey, or routing transit trade through a Turkish company, accesses a 95 to 100 percent deduction on qualifying profit that is protected from erosion at the minimum tax layer.
The practical loss from partial planning is easy to state. An investor who uses only the asset amnesty brings capital into Turkey at a low rate but continues to earn future income under a foreign tax regime, having secured a one-off advantage. An investor who plans the components together establishes past, future and succession under a single structure.
Publication of the implementing communiques on 4 July 2026 answered many questions. It did not answer all of them. A responsible assessment requires identifying what remains open, because these are the areas where a taxpayer applying the regime today is effectively self-assessing against standards the administration has not yet articulated.
The law did not establish an explicit application, certification, registration and approval process for Qualified Service Centre status. It authorised the Ministry of Industry and Technology to determine the procedures and principles. On the available regulations it is not clear by which document, and as at which date, the status is acquired.
This matters directly because the acquisition date determines when the twenty accounting period clock starts. It also determines whether the payroll exemption can be applied at all. Proceeding on the assumption that status is acquired automatically is not a prudent basis for payroll and return practice.
Both the transit trade and Qualified Service Centre deductions require transfer of profit to Turkey by the return filing date. The legislation requires transfer of the profit. Whether this means gross revenue or net profit, and how partial transfers are prorated, is not explained.
Nor is it settled whether netting, set-off, intra-group cash pooling, assignment or payment by a third party qualifies as a transfer. The communique does not expressly regulate these methods.
The protection against inspection depends on establishing a causal link between a base difference and the notified assets. The communique does not set out how that link is to be evidenced or what documentation the administration expects. Ownership chains involving third parties, nominees and group accounts raise the same question.
The numerator and denominator technique of the 80 percent revenue calculation is not fully specified. Exchange differences, other income and recharge items can move the ratio. The treatment of a short first accounting period, and the consequences if a year-end test retroactively undermines payroll treatment applied during the year, are not addressed.
Where an employee performs both qualified service work and out-of-scope work, the communique is silent. A prudent approach separates direct service time with job descriptions and timesheets rather than applying the full exemption by default.
A family that has lived in Germany for two decades holds shares in a German GmbH, a securities portfolio and rental property in Germany. They are considering relocating to Istanbul.
On the Turkish side, the analysis begins with the three year test. Travel history and Turkish address registrations are examined to confirm that Turkish tax residency was not triggered in any of the preceding three years by extended presence. If the record is clean, foreign dividends, rental income and capital gains fall within the 20 year exemption from the date of settlement.
On the German side, the analysis is entirely separate and it is not optional. Germany has operated an exit taxation regime since 1972 under which persons meeting certain conditions may be taxed on unrealised capital gains when they cease to be German tax resident, as though the assets had been sold. For a person holding a significant stake in a German company this can be a triggering event, and recent legislative changes have widened the scope. The liability arising on the German side may exceed the saving delivered by the Turkish exemption.
The Turkey and Germany double taxation treaty offers certain crediting and relief mechanisms between these two layers, but the relief is not automatic. Timing, documentation, residency registration and differences of interpretation as to which income is taxable where all bear directly on the practical outcome. This is why we work alongside a German Steuerberater from an early stage rather than after the residency change has been completed. Measures not taken at the outset of the move cannot generally be corrected once residency has changed.
Comparable parallel analysis is required for relocations from the Netherlands, with its Box 3 wealth taxation and exit tax regime, from the United Kingdom, and from Belgium. Each jurisdiction has its own logic. The common point is that the protection Turkey offers operates only within the Turkish tax system, and source country obligations run independently.
A group with operating subsidiaries in Germany, the United Arab Emirates and Singapore is consolidating regional management functions and considering Istanbul.
The three country test is satisfied on its face, but the assessment looks for genuine economic substance in each country rather than registration alone. The 80 percent revenue test requires that at least 80 percent of the Turkish company's annual revenue comes from the foreign related companies, which places a hard limit on domestic third party work and requires monthly monitoring rather than a year-end calculation.
The service catalogue is then mapped against the two statutory groups. Functions that look like ordinary production, routine sales or call centre operations do not qualify without a functional analysis supporting their characterisation as coordination and management.
Transfer pricing runs alongside. Intra-group service fees must be at arm's length under Article 13 of the Corporate Tax Law, requiring a function, asset and risk analysis, a documented cost pool, a defensible allocation key and an appropriate margin.
The treasury question is then addressed. Qualifying profit must reach Turkey by the return filing date, which for groups running centralised cash pools requires a deliberate decision rather than a default.
Finally, the group-level position is modelled. Where the group falls within the global minimum tax, a low effective rate in Turkey may give rise to a top-up tax elsewhere, and the local incentive advantage must be assessed at group level rather than in isolation.
A trading company purchases goods from suppliers in Asia and sells to buyers in Europe and the Middle East, occasionally routing goods through Turkish bonded warehouses for consolidation.
Where goods remain in the bonded warehouse without entering free circulation and without processing, and are sold to a buyer abroad, the transit trade deduction is available at 95 percent. Where the same goods are released into free circulation or sold to a buyer in Turkey, the deduction is lost for that transaction.
The operational conclusion is that the deduction decision cannot be made on the basis of the invoice address. The physical and legal route of the goods, the residency of both parties, the transfer of title and risk, the net profit calculation and the transfer to Turkey must be evidenced together. We recommend a single-page compliance record for each transaction capturing these elements at the time rather than reconstructing them at year end.
An investor is acquiring Turkish citizenship through property investment and intends to relocate.
The citizenship process and the tax analysis are distinct workstreams that must be coordinated. Citizenship does not confer the 20 year exemption; tax residency does, subject to the three year test. For a person who has never been a Turkish tax resident, the path is typically clear.
Where the investor also holds accumulated assets abroad, the asset amnesty runs in parallel with its own deadline of 31 July 2027 and its own two month repatriation requirement. Where succession planning is in view, the 1 percent inheritance rate applies during the exemption period, which may warrant review of existing wills and offshore structures drafted on different assumptions.
| Date | Obligation or Milestone |
|---|---|
| 4 June 2026 | Law No. 7582 in force. Powers of attorney relied on under Article 8 of the asset amnesty communique must predate this date |
| 1 July 2026 | Transit trade and Qualified Service Centre deductions apply from returns due on and after this date |
| 4 July 2026 | Implementing communiques in force |
| 31 December 2026 | End of the 2026 taxation period. For manufacturers, the former one point reduction applies to 2026 profits |
| 1 January 2027 | Asset amnesty rates increase by half a point for notifications from this date. The 12.5 percent manufacturing rate applies to profits from this period |
| Return filing date for each period | Transit trade and Qualified Service Centre profits must have reached Turkey by this date |
| 31 July 2027 | Final date for asset amnesty notifications. The President may extend by up to one year |
| Two months from each notification | Deadline for repatriation of foreign assets under the asset amnesty |
| Ten days from transfer or notification | Deadline for conversion into the committed instrument where a reduced rate is claimed |
| Two years from each notification | Special fund and notified assets cannot be withdrawn before this point |
| 15th of the month following notification | Bank or intermediary institution declares and pays the collected tax on the Annex 3 return |
15.1. Is the 20 year exemption available only to people who move to Turkey in 2026?
No. Additional Article 20/D contains no closing date or application deadline. The reference to 1 January 2026 identifies the earliest point from which the regime applies. A person who becomes a Turkish tax resident in a later year and satisfies the three year non-liability condition opens a 20 year window running from their own date of settlement.
15.2. Does holding a Turkish passport qualify me for the 20 year exemption?
No. The exemption turns on tax residency, not nationality. A Turkish citizen resident abroad does not qualify by virtue of citizenship, and a foreign national who becomes a Turkish tax resident can qualify provided the preceding three calendar years show no Turkish domicile and no Turkish income tax liability.
15.3. I previously declared rental income from a property in Turkey. Am I disqualified?
Not on that basis alone. Prior tax liability arising solely from rental income, capital income or capital gains does not prevent access to the exemption. What is disqualifying is having been registered as a full Turkish taxpayer during the three year window, including through employment, commercial or self-employment income.
15.4. What is the deadline for the asset amnesty and can I notify more than once?
The final notification date is 31 July 2027 inclusive, and the President may extend it by up to one year. Multiple notifications are possible because each calendar month in which a notification is made is treated as a separate taxation period.
15.5. How do I obtain the 0 percent rate under the asset amnesty?
By committing to hold the notified assets for at least five years in a time deposit account, government domestic debt securities issued under Law No. 4749, lease certificates or venture capital investment funds, and by submitting the Annex 2 undertaking at the time of the notification. The undertaking cannot be added later. The assets must be converted into the committed instrument within ten days of transfer, deposit or notification as applicable.
15.6. What happens if I break the holding commitment?
The bank or intermediary institution determines the tax that was not collected at the time, and that amount is collected together with late payment interest. No tax loss penalty is applied. The protection against inspection and assessment is also lost.
15.7. Does the asset amnesty mean I will not be asked about the source of my funds?
No. The regime does not set aside other legislation concerning assets deriving from crime, and it does not remove the burden of proving that the notified assets belong to you. Where assets are held through third parties, nominees or group companies, the ownership chain should be documented before the notification is filed.
15.8. Can a company with Turkish shareholders qualify as a Qualified Service Centre?
Yes. The law does not require foreign ownership of the Qualified Service Centre company. What it requires is that the entities served are related companies abroad, that the group is actively operating in at least three countries outside Turkey, and that at least 80 percent of annual revenue comes from those foreign related companies.
15.9. Can a branch or liaison office of a foreign company qualify as a Qualified Service Centre?
No. On a prudent reading, a branch or liaison office is not a separate Turkish capital company and therefore falls outside the definition. The regime requires a Turkish joint stock or limited liability company with its own legal personality.
15.10. Are dividends from a Qualified Service Centre subject to Turkish withholding tax?
Yes. The regime exempts qualifying foreign source profit at the entity level. Dividend distributions to shareholders remain subject to ordinary Turkish withholding rules, potentially reduced under an applicable double taxation treaty for foreign shareholders.
15.11. Can foreign tax paid on Qualified Service Centre profit be credited in Turkey?
No. A foreign tax credit is not available in respect of profit deducted under the regime. This is the implicit cost of the structure, and it can make foreign withholding tax a permanent cost, particularly where the 100 percent deduction applies.
15.12. If I cannot use the full deduction in one year, can I carry it forward?
No. Amounts that cannot be deducted in the relevant period because of other deductions, exemptions or prior year losses cannot be carried forward. Where the qualifying activity closes with a loss, no deduction is applied for that period.
15.13. Does the domestic minimum corporate tax erode these deductions?
No. Law No. 7582 expressly added both the Qualified Service Centre deduction and the transit trade deduction to the exemptions and deductions that may be deducted from corporate profit in the domestic minimum corporate tax calculation under Article 32/C of the Corporate Tax Law.
15.14. Can I claim both the 12.5 point manufacturing reduction and the 5 point export reduction on the same profit?
No. Where profits benefit from the 12.5 point manufacturing reduction, the five point export reduction is not additionally applied to the same profits. A second deduction on the export portion of manufactured goods is prohibited.
15.15. When does the 12.5 percent manufacturing rate start?
It applies to profits derived in the 2027 taxation period and subsequent periods. For the 2026 period, the former one point reduction continues to apply for institutions holding an industrial registry certificate and actually engaged in manufacturing.
15.16. Is the Istanbul Financial Centre participant certificate necessary for Qualified Service Centre status?
No. Qualified Service Centre status is independent of physical location and does not require a participant certificate. The certificate operates as a rate-enhancing layer, lifting the corporate deduction from 95 to 100 percent and the wage exemption ceiling from three to five times the gross minimum wage.
15.17. What is the practical difference between a deduction and an exemption here?
The Qualified Service Centre and transit trade regimes operate as deductions rather than exemptions. The profit is not removed from the tax system entirely; it is deducted from the corporate tax base and shown in the return under exemptions and deductions available where profit exists. The distinction has consequences: the deduction depends on there being profit, on the profit reaching Turkey by the filing date, and it cannot be carried forward if unused.
15.18. Are the incentives operational today?
The legislation is in force and the implementing communiques have been published. Several procedural questions remain open, most significantly the mechanism by which Qualified Service Centre status is formally acquired, the measurement of the transfer condition, and the evidentiary standards for the asset amnesty protection. Where a position is material, an advance ruling before first application is the prudent course.
Three companion documents accompany this guide and are available for download.
Bayraktar Attorneys acts exclusively for foreign nationals in Turkey. Our practice covers Turkish citizenship by investment, residence permits and immigration, real estate transactions, corporate structuring, and inheritance and succession planning across multiple jurisdictions.
For matters arising from this package, our work typically begins with an eligibility assessment against the three year non-liability test, followed by identification of which income falls within scope and what documentation will be required, coordination with advisers in the source jurisdiction, and construction of past assets, future income and succession planning under a single legal framework. The sequence in which applications are made is determined within that analysis, and it is rarely interchangeable.
This article is prepared for general information purposes and reflects the position as at the date of publication. It does not constitute legal or tax advice and should not be relied upon as a final opinion without examination of the specific facts, including the shareholding chain, service contracts, the legislation of the countries involved, the duties of personnel and the relevant financial data. Legislation, communiques and administrative practice in this area continue to develop.
