Turkey's Law No. 7582: a 20-year exemption on foreign income. What it covers, what it doesn't, and what is still open

On 4 June 2026 Turkey published Law No. 7582. A person who becomes a Turkish tax resident, and was not one before, pays no Turkish income tax on income earned outside Turkey for up to 20 years. "Zero tax" is a simplification. Below: what the law actually does, what it leaves untouched, how the exemption is claimed in practice, and which questions still have no official answer.

What the law is

Formally, Law No. 7582 inserts a new article 20/D (Mukerrer 20/D) into the Turkish Income Tax Law (Gelir Vergisi Kanunu, GVK). The principle is simple: an individual who becomes tax resident in Turkey, and was not tax resident there in the preceding period, is exempt from Turkish income tax on income and gains arising outside Turkey for up to 20 years.

Timeline

• 25 April 2026 — President Erdogan announces the proposal for a 20-year exemption;
• 21 May 2026 — the Grand National Assembly passes the law;
• 3 June 2026 — the President signs it;
• 4 June 2026 — published in the Official Gazette (Resmi Gazete) as Law No. 7582;
• 4 July 2026 — General Communique No. 333 sets out the application procedure;
• 7 September 2026 — GIB publishes guide No. 616 explaining, in practical terms, how to obtain the exemption.

What the exemption covers

• Foreign-source income, exempt from Turkish income tax for up to 20 years. This includes business income earned abroad, dividends from foreign companies, interest on foreign accounts and capital gains on assets located abroad: foreign shares, stakes in foreign companies, foreign real estate.
• No obligation to declare the exempt foreign income on a Turkish return. That removes much of the administrative burden as well as the tax.
• Inheritance and gift tax at a flat 1% for beneficiaries of the regime, instead of the standard progressive scale (up to 10% for close family under the inheritance scale).

What the law does NOT do

This is the part that marketing usually leaves out.

• Turkish-source income is taxed as normal, at 15–40%. A salary from a Turkish employer, rent from Turkish property, profits of a Turkish business, a gain on selling Turkish property within five years of purchase: all taxable under the ordinary rules.
• Withholding tax abroad stays. If the country where the income arises deducts tax at source (on dividends, interest, royalties), it keeps doing so under its own law and any applicable tax treaty. Turkey cannot switch that off.
• Your previous country's rules still apply. Leaving a country does not end its claims automatically: exit taxes, extended or "trailing" tax liability, controlled foreign company (CFC) rules and, for US citizens, citizenship-based taxation can all reach income that Turkey exempts. See our article on tax residency and the separate piece for US citizens.

How the exemption is claimed: GIB guide No. 616

Until September the main practical question was how the exemption is actually switched on. Communique No. 333 (4 July 2026) set out the procedure, and GIB guide No. 616 (7 September 2026) explained it in plain terms. The key points:

• It is not automatic. You need a certificate issued by the tax office. You apply once you have become a Turkish tax resident, and by 31 December of the year in which you became resident.
• Late movers get more time. If you move in November or December, the deadline is the end of February of the following year.
• Missed deadline = no certificate. The guidance does not provide for late applications.
• The previous three years are checked. Employment or business activity in Turkey during that period disqualifies you. According to the guidance, rental income, dividends and gains on selling Turkish assets in that period do not.
• Errors can surface later. If it turns out the conditions were not met, the certificate can be cancelled retroactively and the tax collected with penalties and late-payment interest.

For someone becoming resident in 2026, that means applying by 31 December 2026, or by end of February 2027 if the move happens in November or December.

The 3-year look-back: what is settled and what is not

Earlier commentary disagreed on how the "not previously resident" condition worked. The guide now confirms that the three years before the move are examined and that working or running a business in Turkey during that period disqualifies an applicant. What still needs individual verification is how borderline cases are treated: for example, a person who spent long periods in Turkey without a job there, or who held a residence permit for years before deciding to move. Treat the look-back as a point to confirm with a Turkish tax lawyer for your facts, not as a box you can tick yourself, especially given the risk of retroactive cancellation.

Who benefits, and who barely does

The benefit is largest if:

• most of your income arises outside Turkey: a foreign business, an investment portfolio, capital gains on a planned sale of foreign assets;
• you are prepared to become tax resident in Turkey in substance (see the 183-day rule);
• you have not lived or worked in Turkey in the recent past;
• you plan to pass on wealth: 1% inheritance and gift tax is a real difference.

The benefit is small or nil if:

• your income arises in Turkey — it is taxed at 15–40% as usual;
• you are not ready to spend most of the year in Turkey and want to stay tax resident elsewhere;
• your income comes from a country with high withholding tax that Turkey cannot remove;
• your current country continues to tax you after you leave (US citizens, people caught by exit taxes or CFC rules).

The open question: citizenship by investment holders

Does the exemption apply to someone who obtained Turkish citizenship through the investment programme but has never been a Turkish tax resident? This matters to anyone planning "passport plus tax regime" as a package.

Neither Communique No. 333 nor guide No. 616, as summarised in available sources, addresses citizenship-by-investment holders as a separate category. What is clear is the logic of the law: the exemption is attached to tax residency, not to nationality. A passport on its own does not make you tax resident and does not trigger the exemption. Whether a new citizen is treated any differently from a foreigner when moving remains an open question; confirm it for your case before relying on it.

Risks worth keeping in mind

• Practice is still forming. The law dates from June 2026. Further clarifications from GIB are likely over the next 12–24 months.
• Retroactive cancellation. The guide makes clear that an exemption granted on wrong facts can be withdrawn with penalties.
• Programme thresholds move. The citizenship threshold has changed three times in nine years ($1M → $250k → $400k).
• Bank compliance. Turkish transactions and transfers fall under MASAK (financial intelligence) monitoring; plan the documentation of source of funds early.
• Reputational background. Turkey has revoked citizenship from 451 investors in a fraud case. Use only licensed (SPK) valuers and reputable lawyers.

What to do next

• Work out what share of your income arises outside Turkey — that determines the real benefit.
• Check what your current country does when you leave: exit tax, trailing liability, CFC rules.
• Decide honestly whether you will live in Turkey for most of the year.
• Diarise the certificate deadline: 31 December of the year you become resident (end of February for November–December movers).
• If you also want a passport, read citizenship by investment: $400k, timeline and real cost; if you are still choosing a country, see Turkey vs UAE vs Italy vs Greece.

Frequently asked questions

Is it really "0% tax"?

No. It is 0% Turkish income tax on your foreign-source income for up to 20 years. Turkish-source income is taxed at 15–40%, and foreign withholding taxes still apply.

Is the exemption automatic once I am resident?

No. Under GIB guide No. 616 you must obtain a certificate from the tax office by 31 December of the year you become resident, or by the end of February of the following year if you move in November or December. Late applications are not accepted.

Do I have to declare my foreign income in Turkey?

No. Exempt foreign income does not have to be reported on a Turkish return.

Who is disqualified by the 3-year look-back?

According to the guidance, people who were employed or ran a business in Turkey in the three years before the move. Rental income, dividends and gains on Turkish assets in that period do not disqualify. Borderline cases should be checked with a Turkish tax lawyer.

Is a Turkish passport enough to get the exemption?

No. The exemption is tied to tax residency, not citizenship. How it applies to citizenship-by-investment holders has not been specifically clarified.

What is the inheritance tax rate?

A flat 1% for beneficiaries of the regime, instead of the standard progressive scale.

This article is general information, not tax, legal or investment advice. Tax consequences depend on your individual circumstances and on the rules of the country where you are currently tax resident. Laws, rates and government programme terms change; figures are current as of the publication date. Take advice from qualified professionals before acting.