Türkiye’s Grand National Assembly does not often make headlines in the investment migration world. On May 21, 2026, it did. Parliament passed into law a fiscal package that includes something most globally mobile families have never seen from a country that also offers a $400,000 citizenship by investment route: a 20-year full exemption from Turkish income tax on all foreign-source earnings, with no annual flat fee, no lump sum, and no catch buried in the fine print.
This is now law. President Erdoğan, who initiated the package himself, has 15 days to promulgate it. A veto is not a realistic scenario.
New Tax Regime in Details
The personal tax exemption works as follows. Individuals who had no domicile and no Turkish tax liability during the three calendar years before relocating qualify for the 20-year holiday. During that period, foreign-source income — dividends from an overseas company, capital gains on a foreign portfolio, rental income from property abroad, returns from an investment fund — does not appear on a Turkish tax return at all. Domestically earned income remains taxable under Türkiye ‘s standard progressive rates of 15% to 40%.
Inheritance and gift tax for qualifying individuals drops to a flat 1%, down from Türkiye’s standard graduated rates of up to 30%. That alone has structural implications for family wealth planning.
The law also introduces a corporate dimension. Manufacturing companies see their general corporate tax rate cut to 12.5% from 25%. Manufacturers who export their own goods are taxed at 9%. Companies operating within the Istanbul Finance Centre receive full corporate tax exemption on transit trade income, and that exemption for financial services export income at the IFC runs through 2047 — a planning horizon long enough to build an institution around.
Türkiye’s Initiative Comparison
The comparison matters because Türkiye is not entering an empty room. Several European countries have offered non-dom or special tax residency regimes for years, and internationally mobile families know them well. What Türkiye has done is enter the space at a moment when its competitors have either raised their prices or narrowed their eligibility.
Italy’s lump-sum regime — long a favorite for high-net-worth relocators — now costs €300,000 per year and runs for 15 years. Greece’s non-dom regime charges €100,000 annually for the same 15-year window. Portugal’s NHR successor, IFICI, offers just 10 years and restricts qualifying income categories significantly. The UK abolished its non-dom status entirely in 2025.
Türkiye charges nothing for 20 years. There is no annual flat fee in the legislation as passed. For a family with substantial foreign income, the arithmetic over a 20-year period is not just a marginal advantage.
There is an important nuance worth stating clearly: expenses linked to exempt foreign income cannot be deducted from Turkish taxable income, and taxes paid abroad on that income cannot be credited against Turkish tax. These are real constraints, and any individual structuring around this regime will need proper advice. But they do not undercut the headline proposition for most qualifying profiles.
The corporate architecture of this package — the Istanbul Finance Centre exemptions running to 2047, the halved manufacturing tax rates, the IFC transit trade relief — is a result of long-term policy. Türkiye ‘s Finance Minister Mehmet Şimşek has described 2026 as the Year of Reforms, a deliberate repositioning of Istanbul as a competitive hub for the kind of capital that has historically flowed to Dubai, Singapore, and to a lesser extent Amsterdam and Zurich.
The timing is pointed. The conflicts affecting Gulf Cooperation Council financial hubs have disrupted capital flows that previously treated Dubai as an automatic anchor. Wealth that has been repositioning from the GCC now needs somewhere to go. Istanbul, with its location bridging Europe and the Middle East, its deep real estate market, its CBI route already offering citizenship in four to six months, and now a 20-year personal tax holiday, is making a coherent argument for itself.
Türkiye’s citizenship by investment program — real estate at $400,000, held for three years — has existed for years. What it lacked was a compelling tax layer. That gap has now been closed. A qualifying investor who acquires Turkish citizenship, establishes tax residency, and structures their affairs appropriately could hold a second passport with visa-free access to over 110 destinations while paying no Turkish tax on foreign income for two decades. The combination is genuinely unusual in the market.
—At Bayat Group, we do not approach a new law as a reason to pivot a client’s strategy. We approach it as a new piece on a board that has been shifting rapidly. Türkiye’s 20-year exemption is a meaningful addition to the landscape — but it is most valuable as part of a layered structure, not as a standalone solution.
For families whose income is generated primarily outside Türkiye, whose estate planning would benefit from a 1% inheritance tax environment, and who want a citizenship that does not require sustained physical presence to maintain, this law creates options that did not exist before. For other whose situation is more complex — businesses operating in multiple jurisdictions, trust structures, existing tax residency obligations in high-treaty countries — the implementation details that follow this legislation will matter enormously.
Disclaimer: This article is provided for informational and analytical purposes only and does not constitute legal, tax, financial, or investment advice. While efforts have been made to ensure accuracy based on available legislative reporting at the time of writing, tax laws and their interpretation may change, and certain provisions may be subject to final promulgation, implementation guidance, or administrative clarification. Readers should verify all details with official government sources and seek qualified professional advice before making any residency, tax, or investment decisions.