Published in the Official Gazette on 4 June 2026 and entering into force on the same date, Law No. 7582 on Amendments to Certain Laws constitutes one of the most comprehensive reforms introduced into Turkish tax legislation in recent years. The reform is not confined to modifications of tax rates or technical tax provisions; rather, it encompasses a broad range of strategic objectives, including the restructuring of public debt collection mechanisms, the promotion of international investment, the attraction of highly qualified human capital to Türkiye, the enhancement of international trade in services, the strengthening of the Istanbul Financial Center, and the integration of undeclared assets into the formal economy.

An examination of the overall structure of the Law reveals a clear policy orientation toward aligning Türkiye with increasingly competitive international tax regimes in order to attract global capital, investment, and highly skilled professionals. In particular, the newly introduced exemption regime applicable to foreign-source income and the incentives granted to qualified service centers represent noteworthy developments from the perspective of international tax competition.

A More Flexible Approach to the Collection of Public Receivables

Through amendments to Article 48 of the Law on the Procedure for the Collection of Public Receivables No. 6183, the maximum period for the deferral of public debts has been extended from 36 months to 72 months. As a result, the payment facilities available to taxpayers seeking restructuring of public liabilities have effectively doubled.

This amendment is particularly significant for businesses experiencing financial constraints due to economic fluctuations. Extending repayment periods may contribute to the preservation of cash flow and business continuity. Moreover, increasing the threshold for debt deferrals without the requirement of collateral from TRY 50,000 to TRY 1,000,000 is of particular relevance to small and medium-sized enterprises. By reducing collateral requirements, the amendment is expected to facilitate more effective access to the deferral mechanism.

Twenty-Year Income Tax Exemption for Foreign-Source Income and a 1% Inheritance Tax Rate

The newly introduced Article 20/D of the Income Tax Law constitutes one of the most significant innovations in Turkish tax law in recent years. Under this provision, individuals deemed resident in Türkiye may benefit from a twenty-year exemption from income tax on foreign-source income and earnings, provided that certain statutory conditions are satisfied.

The principal objective of the provision is to make Türkiye a more attractive place of residence for international investors, high-net-worth individuals, entrepreneurs, fund managers, and globally mobile professionals earning income from foreign sources.

Eligibility for the exemption requires that the individual had neither domicile nor tax liability in Türkiye during the three calendar years preceding the date on which he or she became resident in Türkiye. However, the legislator has softened this requirement by explicitly providing that prior tax liability arising from real estate income, investment income, or capital gains derived in Türkiye shall not prevent an individual from benefiting from the exemption.

Income falling within the scope of the exemption is excluded from annual income tax returns. Even where a taxpayer is required to file an annual return due to other income sources, exempt foreign-source income is not included therein. Accordingly, the provision establishes not merely a reduced tax burden but a distinct tax regime under which certain categories of income are entirely excluded from Turkish income taxation.

The legislation further provides that expenses and costs attributable to exempt income may not be taken into account in determining taxable income in Türkiye. Likewise, foreign taxes paid on exempt income may not be credited against Turkish income tax. The regime therefore establishes a comprehensive exemption system while limiting interactions between exempt income and other taxable income categories.

The Law also incorporates a safeguard mechanism. Where it is subsequently determined that the conditions for benefiting from the exemption were not fulfilled, the taxes that were not assessed in due time shall be deemed to constitute tax loss and shall be assessed and collected in accordance with general tax rules. Consequently, individuals intending to benefit from the regime should carefully evaluate their residency status, historical tax records, and sources of income.

The reform has implications not only for income taxation but also for intergenerational wealth transfers. Pursuant to amendments made to the Inheritance and Transfer Tax Law, inheritance transfers occurring within the exemption period in respect of individuals benefiting from Article 20/D shall be subject to an inheritance and transfer tax rate of 1%.

This provision substantially reduces the tax burden associated with the transfer of high-value assets through inheritance. Viewed holistically, the reform demonstrates the legislator's intention not only to attract foreign-source income into Türkiye but also to encourage wealthy individuals to establish long-term residence and structure their wealth within Türkiye.

In conclusion, Article 20/D and the related amendments to the Inheritance and Transfer Tax Law create a significant exception to the traditional worldwide taxation principle applicable to resident taxpayers under Turkish tax law and provide a substantial long-term tax advantage for internationally mobile individuals. Nevertheless, careful legal analysis remains essential in relation to residency status, preservation of eligibility conditions, characterization of foreign-source income, and international tax planning.

A New Legal Framework for Qualified Service Centers

Through the provisions introduced into the Foreign Direct Investment Law No. 4875 by Law No. 7582, the concept of a “Qualified Service Center” has been incorporated into Turkish law for the first time. The primary objective of this reform is to encourage multinational enterprise groups to conduct intra-group service functions—such as finance, accounting, risk management, technology consulting, data analytics, human resources, brand management, and similar support activities—from Türkiye.

To qualify for this status, the relevant corporate group must operate actively in at least three different countries, and the service center must derive at least 80 percent of its annual revenue from related entities located abroad. These requirements demonstrate that the regime is specifically designed for internationally operating corporate groups and that the incentives are intended to support genuine cross-border service activities.

The framework enables multinational groups to centralize finance, technology, human resources, data management, accounting, and other intra-group service functions in Türkiye. In this respect, the reform aims to position Türkiye not merely as a center for investment and production but also as a regional hub for management, coordination, and service exports.

Another noteworthy feature of the regime is the restriction imposed on legal advisory services relating to Turkish law. Such services may only be obtained from attorneys or attorney partnerships operating under the Attorneyship Law. Accordingly, while the regime seeks to encourage foreign investment and service exports, it simultaneously preserves the regulatory framework governing the legal profession.

Overall, the qualified service center regime constitutes a new investment and tax incentive mechanism designed to support Türkiye’s ambition to become a regional center for management, finance, technology, and professional services.

Income Tax Incentives for Qualified Service Personnel

Law No. 7582 also introduces significant income tax incentives for highly qualified personnel employed by qualified service centers. Under the new regime, the portion of employees’ remuneration not exceeding three times the gross minimum wage is exempt from income tax. For qualified service centers operating within designated industrial zones and the Istanbul Financial Center, this threshold may be increased to five times the gross minimum wage.

The purpose of this incentive is to encourage the employment of highly skilled professionals engaged in high value-added service activities and to facilitate the relocation of regional management, technology, finance, and consulting operations to Türkiye by multinational enterprises.

Accordingly, the reform should be viewed not merely as an investment incentive for corporations but also as a significant tax policy instrument aimed at attracting qualified human capital to Türkiye. When considered together with the corporate tax advantages granted to qualified service centers, the regime establishes a comprehensive incentive framework that reduces the tax burden for both employers and employees.

Tax Incentives for International Trading Activities

Amendments introduced to Article 10 of the Corporate Tax Law by Law No. 7582 allow taxpayers to deduct 95 percent of profits derived from the sale of goods purchased abroad and sold abroad without being brought into Türkiye, as well as profits arising from intermediary activities in international trade transactions conducted entirely outside Türkiye. For entities operating within certain industrial zones and the Istanbul Financial Center, this deduction rate may reach 100 percent.

Eligibility for the incentive is subject to several conditions. Most notably, the relevant profits must be transferred to Türkiye by the deadline for filing the corporate income tax return for the relevant fiscal year. Furthermore, in intermediary transactions, neither the seller nor the purchaser of the goods may be located in Türkiye.

The incentive seeks to encourage the conduct of international trading operations through Türkiye and supports the country's objective of becoming a regional trading hub. It is expected to provide substantial tax advantages for businesses engaged in transit trade, commodity trading, supply chain management, and international trading operations.

The requirement that profits be transferred to Türkiye further demonstrates that the incentive aims not only to reduce the tax burden but also to promote foreign currency inflows into the Turkish economy.

Corporate Tax Incentives for Qualified Service Centers

Law No. 7582 grants qualified service centers the right to deduct 95 percent of foreign-source profits derived exclusively from their qualified service activities from the corporate tax base. For qualified service centers operating in designated industrial zones and within the Istanbul Financial Center, the deduction rate may increase to 100 percent.

In order to benefit from the incentive, the relevant income must be transferred to Türkiye by the filing deadline of the corporate income tax return for the relevant accounting period. Furthermore, the incentive may be applied for twenty fiscal periods beginning from the accounting period in which the qualified service center commences operations.

The purpose of the measure is to encourage multinational enterprise groups to conduct intra-group management, finance, technology, data analytics, and human resources functions through Türkiye. The incentive constitutes one of the most extensive export-of-services incentives ever introduced in Turkish tax legislation.

Given the requirement that profits be repatriated to Türkiye, the regime is intended not only to reduce corporate tax liabilities but also to ensure that foreign currency revenues generated through service exports contribute to the Turkish economy. In this respect, the incentive forms an integral component of both Türkiye’s international investment strategy and its broader policy of promoting service exports.

Reduced Corporate Income Tax for Manufacturing and Agricultural Production Activities

Pursuant to amendments made to Article 32 of the Corporate Tax Law, the corporate income tax rate applicable to income derived exclusively from manufacturing activities conducted by entities holding industrial registry certificates, as well as income derived exclusively from agricultural production activities, has been reduced to 12.5 percent.

The measure aims to encourage investment, production, and employment by lowering the tax burden on manufacturing and agricultural activities. It provides a significant fiscal advantage for businesses operating in the industrial and agricultural sectors, particularly with regard to investment decisions, capacity expansion projects, and competitiveness enhancement.

Nevertheless, the reduced rate applies solely to income generated from qualifying manufacturing and agricultural production activities. Income derived from other activities remains subject to the general corporate tax regime. Accordingly, the proper allocation of income among different business activities and the maintenance of accurate accounting records are of critical importance.

Viewed broadly, the reform reflects the use of tax policy as a tool for supporting the productive economy and encouraging investments that generate added value.

Asset Disclosure Regime for Domestic and Foreign Assets

Law No. 7582 introduces a new asset disclosure regime through Provisional Article 19 added to the Corporate Tax Law No. 5520. The provision enables certain assets located abroad, as well as assets physically located in Türkiye but not recorded in statutory books, to be declared and integrated into the formal financial system. The principal objective of the regime is to enhance voluntary tax compliance and facilitate the formalization of previously undisclosed assets.

Under the new framework, real and legal persons may disclose cash, gold, foreign currency, securities, and other capital market instruments held abroad until 31 July 2027 through banks or intermediary institutions. Assets disclosed abroad must be transferred to accounts opened with Turkish banks or intermediary institutions within two months following the disclosure date. Similarly, taxpayers subject to income tax or corporate tax may disclose assets located in Türkiye but omitted from their statutory accounting records, provided that such assets are deposited with banks or intermediary institutions and properly documented.

Taxpayers maintaining statutory books are required to record disclosed assets in their accounting records as of the disclosure date. Corporate taxpayers maintaining books on a balance-sheet basis must establish a special reserve account on the liabilities side of the balance sheet. Such reserves may not be withdrawn from the business or used for purposes other than capital increases for a period of two years.

A tax is imposed on disclosed assets at a general rate of 5 percent. However, the applicable rate is reduced progressively where the taxpayer undertakes to retain the assets in specified investment instruments for a prescribed period. Depending on the duration of the commitment, the rate may decrease to as low as 0 percent.

One of the most significant features of the regime is the protection it affords against tax audits and tax assessments. As a general rule, no tax audit or tax assessment may be conducted with respect to properly disclosed assets. Nevertheless, this protection is conditional. Failure to comply with statutory requirements concerning disclosure, transfer, registration, payment of tax, or investment commitments may result in the loss of the protection granted under the regime.

The regime further provides that disclosures made after the commencement of a tax audit or after referral to the tax assessment commission will not provide protection with respect to the relevant audit or assessment process. Consequently, while the regime offers substantial legal certainty and tax advantages, strict compliance with the statutory requirements remains essential.

In essence, Provisional Article 19 establishes an important voluntary compliance mechanism designed to facilitate the integration of foreign and unregistered assets into the formal economy. However, the effectiveness of the regime depends upon full compliance with the disclosure, transfer, registration, payment, and commitment requirements prescribed by law.

Additional Incentives under the Istanbul Financial Center Regime

Law No. 7582 further expands the scope of incentives available under the Istanbul Financial Center (“IFC”) regime and significantly extends the duration of various tax advantages available to eligible participants. In particular, certain incentives that were previously scheduled to expire in 2031 have been extended until 2047, while the duration of some tax benefits has been increased from five years to twenty years.

The legislation also integrates qualified service centers into the broader IFC incentive framework. As a result, qualified service centers operating within the IFC may benefit from corporate tax incentives relating to foreign-source service income as well as income tax advantages applicable to qualified service personnel.

These amendments reflect the legislator’s intention to transform the Istanbul Financial Center into more than a hub for financial institutions. The IFC is increasingly envisioned as an international center for regional management, technology, consulting services, and cross-border service exports.

From a legal and economic perspective, the extended duration of the incentive regime enhances regulatory predictability for financial institutions, investment funds, portfolio management companies, fintech enterprises, and international investors. By providing a stable and long-term framework, the amendments are expected to support strategic investment decisions and strengthen the competitiveness of the Istanbul Financial Center in relation to other global financial centers.

General Assessment

When assessed as a whole, Law No. 7582 represents considerably more than a series of technical amendments designed to reduce tax burdens. Rather, it constitutes a comprehensive reform package aimed at enhancing Türkiye’s competitiveness in international investment, financial services, service exports, and cross-border capital movements. The newly introduced foreign-income exemption regime, incentives for qualified service centers, tax advantages for international trading activities, and additional support mechanisms for the Istanbul Financial Center collectively demonstrate a strategic effort to position Türkiye as a regional hub for finance, management, and high-value-added services.

A common characteristic of many of the incentives introduced by the Law is that they are conditional upon the transfer of income to Türkiye, the conduct of activities through Türkiye, or the retention of assets within the country for specified periods. This approach indicates that the legislature seeks not only to provide tax benefits but also to encourage foreign currency inflows, attract international capital, and ensure that high-value economic activities are carried out within Türkiye.

Another notable feature of the reform is its integrated support for both the productive economy and the service economy. While reduced corporate income tax rates have been introduced for manufacturing and agricultural production activities, new mechanisms have simultaneously been established to encourage multinational enterprises to locate management, finance, technology, and consulting functions in Türkiye. This demonstrates an increasing use of tax policy not merely as a revenue-generating instrument but also as a tool for economic development and investment promotion.

Nevertheless, the majority of the exemptions, deductions, and incentives introduced by the Law are subject to detailed statutory conditions. Given the well-established principle in Turkish tax jurisprudence that tax exemptions and incentives should be interpreted narrowly, taxpayers seeking to benefit from these provisions must ensure that their business operations, contractual arrangements, accounting records, and corporate structures fully comply with the relevant legal requirements. Failure to do so may result in retroactive tax assessments, tax loss penalties, and protracted tax disputes.

Accordingly, the reforms introduced by Law No. 7582 should not be viewed merely as tax-saving opportunities. Rather, they should be understood as a comprehensive framework creating significant opportunities—and corresponding legal responsibilities—in the areas of investment planning, corporate structuring, international tax strategy, and wealth management. For multinational enterprises, foreign investors, family offices, investment funds, and high-net-worth individuals in particular, careful legal and tax analysis remains essential in order to maximize the benefits offered by the new regime while effectively managing potential compliance risks.

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