What does the new rule provide?
One of the important tax measures introduced in 2026 is a 20-year income tax exemption for qualifying foreign-source income and gains of individuals who newly become resident in Türkiye. Repeated Article 20/D, added to the Income Tax Law by Law No. 7582, may be particularly relevant to people who have lived abroad for a long period and plan to relocate to Türkiye. Implementation details are set out in Income Tax General Communiqué No. 333 dated 4 July 2026.
What is the main eligibility condition?
The regime applies to individuals who are regarded as resident in Türkiye from 1 January 2026 and who, during the preceding three calendar years, had neither a domicile in Türkiye nor a disqualifying Turkish tax liability. It is not limited to foreign nationals: Turkish citizens returning permanently after living abroad may also qualify. Tax liability in that prior period arising only from rental income, investment income or capital gains does not, by itself, prevent eligibility.
Which income may qualify?
The exemption concerns income and gains derived outside Türkiye. The Communiqué gives examples including dividends from a foreign company and rent from overseas real estate. However, money received from abroad is not automatically foreign-source income. The source, place of activity and true nature of the income must be assessed. Professional income from work performed in Türkiye does not become foreign-source merely because the customer is abroad or payment is made in foreign currency.
Can the person also conduct business in Türkiye?
Article 20/D does not require the person to avoid all economic activity in Türkiye. The person may conduct a business or professional activity and be taxable on Turkish-source income, but that income is taxed under the ordinary rules. Qualifying foreign income is not included in an annual income tax return; if a return is required for other income, the exempt foreign income remains outside it.
Why does the date of becoming resident matter?
The date on which the person becomes resident in Türkiye must be determined correctly. Article 4 of the Income Tax Law refers to domicile and presence in Türkiye for more than six continuous months in a calendar year, but the individual facts may also matter. Previous residence and work permits, actual living arrangements and the nature of the move should be reviewed together; relying on one registration or entry date may not be sufficient.
The exemption is not automatic
A timely application must be made to the competent tax office for an Exemption Certificate for Income and Gains Derived Abroad (Annex 1). As a general rule, the application is due by the end of the calendar year in which the person becomes resident. If residence begins in the final two months of that year, the deadline extends to the end of February of the following year.
A valuable regime that requires a sound file
Repeated Article 20/D can be significant for new residents with foreign investments or income sources. The residence date, tax status during the preceding three years, source and country of the income, Turkish activities and structure of the foreign portfolio should be considered together. If the conditions were not in fact met, unpaid tax may later be assessed with a tax-loss penalty and late-payment interest. This article is for general information; eligibility must be assessed for the individual facts.