According to the Presidential Decree, which we consider to be advisory in nature, investors who have not been tax residents in Türkiye for the past three years will be exempt from tax on their foreign-sourced income for a period of 20 years if they take up residence in the country. This exemption covers interest income from foreign banks, dividends received from overseas companies, international copyright royalties, and rental income from real estate abroad. Income earned within Türkiye, however, remains subject to normal tax rules. This regulation aims specifically to encourage technology entrepreneurs, international consultants, and professionals who have achieved success abroad to settle in Türkiye. Additionally, the inheritance and gift tax rate for these individuals has been reduced to a symbolic rate of 1%.
Full Tax Exemption on Service Exports Is Now in Effect
As part of our consulting services, we would like to specifically highlight that Presidential Decree No. 11257 has increased the tax exemption on income from the export of services to 100%. Whereas previously 80% of income generated from services provided abroad such as software, engineering, architecture, design, and call center services could be deducted from the tax base, the entire amount is now eligible for the exemption.
What does this mean? A software company established in Türkiye effectively pays zero corporate tax on the profit it generates from services provided to its overseas clients. This advantage directly benefits a wide range of companies, from mobile game studios to international consulting firms. The regulation applies to income earned starting January 1, 2026, and is currently in effect.
Competitive Tax Rates for Exporters and Manufacturers
Another key aspect of the package’s legislative process is the reduction in corporate tax rates. While the standard rate under the current system is 25%, the new regulation proposes lowering this rate to 9% for manufacturing and exporting companies and to 14% for other exporting firms. These rates position Türkiye to compete directly with its regional rivals. For companies operating within the Istanbul Financial Center, the tax exemption on profits from transit trade is being increased to 100%. For firms operating outside the Center, 95% of these profits are also exempt from tax.
What Investors Should Keep in Mind
While the package offers significant opportunities, not all of the regulations are at the same legal stage. While the service export exemption is already in effect, provisions such as the corporate tax reduction and personal income tax exemption are awaiting the completion of the omnibus bill process. For this reason, investors must seek support from expert legal and financial advisors when conducting their tax planning.
Legal certainty, property rights, and predictable judicial processes continue to be as decisive as tax advantages in investment decisions. However, these steps taken by Türkiye are regarded as one of the most comprehensive moves to solidify the country’s goal of becoming a hub for international direct investment.
