The foreign-source income exemption introduced in 2026 does not exempt all income of everyone who moves to Türkiye for twenty years. The conditions are cumulative: registered residence and tax liability status in the three preceding calendar years, the date on which the person is deemed to have become resident in Türkiye, the foreign origin of the income, and a timely application. Income earned in Türkiye does not become exempt automatically under this regime.
Legal Nature of the Practice and How It Differs from Other Obligations
The foreign-source income exemption does not mean that every payment received from a foreign bank account is taken out of tax. The person’s residence history and the legal source of the income are decisive; an exemption certificate does not replace an immigration or work permit.
Conditions for Claiming the Exemption for Persons Resident in Türkiye
Supplementary Article 20/D (mükerrer 20/D) of the Income Tax Law No. 193 (Gelir Vergisi Kanunu, GVK) applies to individuals who are deemed resident in Türkiye as of January 1, 2026. Citizenship or a foreign passport is not the criterion on its own. Residence is determined for income tax purposes by registered residence (ikametgâh) and the length of stay in a calendar year, read together with the special exceptions in the law.
In the last three calendar years before the person is deemed resident in Türkiye, the person must not have a registered residence in Türkiye and, as a rule, must not have a tax liability there. However, the law and General Communiqué No. 333 (333 Seri No.lu Tebliğ) contain special provisions under which tax liabilities arising from certain types of rental income, income from movable capital and capital gains in that period do not count as obstacles. It cannot be said that any earlier tax record is an automatic ground for refusal, nor that all old records are irrelevant. [1; Income Tax Law, supplementary Article 20/D; Communiqué No. 333]
Why Earlier Wages or Commercial Activity Matter
The guide explains, with separate examples, situations such as earning wages in Türkiye during the previous three-year period and tax liability linked to commercial activity. The fact that wages were subject to withholding (stopaj) and not declared in an annual return does not mean this history will always be disregarded. By contrast, an earlier rental tax liability that the law expressly excludes may be assessed differently.
For this reason, the application file should not consist only of a current tax registration check. Past employment, company, rental, income from movable capital and address records should be pulled year by year. The review is carried out on the basis of the three calendar years set by the law, not a rolling period such as “the last 36 months”.
Application Deadline and Exemption Certificate
The application is made to the relevant tax office within the calendar year in which the person is deemed resident in Türkiye. For persons deemed resident during the last two months of the year, the application window runs until the end of February of the following year. Persons who meet the conditions are issued an exemption certificate upon application. Missing the deadline should not be seen as merely a delay in issuing the document; it affects the ability to benefit from the regime.
The application form, the residence date and the documents showing prior-period conditions must be consistent. If the population registry address (nüfus adresi), entry and exit records and a foreign residence certificate show different dates, the discrepancy must be explained. Obtaining a document from the tax office does not make inaccurate information about the past lawful.
Which Foreign Income of a Person Resident in Türkiye Falls Within the Twenty-Year Exemption?
The exemption is aimed at earnings and periodic income (irat) obtained abroad. Income paid in foreign currency or from a foreign bank does not necessarily show that its source is abroad. For work performed in Türkiye, or income arising from a business or real estate in Türkiye, the source rules are examined separately.
No annual return is filed for foreign-source income covered by the exemption, and such income is not included in a return filed for other income. Türkiye-source income is taxed under its own provisions. Assessing the prior three-year condition in relation to starting work in Türkiye during the exemption period is a separate question; a business established later must not be confused with the starting condition.
Expenses, Foreign Tax and Breach of Conditions
Expenses attributable to exempt earnings cannot be transferred to taxable earnings in Türkiye. Nor can it be assumed that foreign tax paid in a foreign country on exempt income will be credited against tax calculated on other income in Türkiye. Income and expenses are tracked separately by source.
If it is found that the starting conditions were not in fact met, the consequences may include cancellation of the document and tax, penalties and interest. For this reason, keeping the file after the document is received and preserving the records relating to the conditions is important.
Law No. 7582 (7582 sayılı Kanun) also introduces a 1% rate for transfers by inheritance (veraset) occurring within the twenty-year period to persons benefiting from this exemption. This does not mean that the estate is entirely exempt from tax or that no return need be filed; estate procedures are carried out separately.
Residence, Income and Prior-Period Documents to Be Submitted with the Application
| Area | Evidence |
|---|---|
| Residence | Registered residence, entry and exit and stay records |
| Previous three calendar years | Foreign and Turkish tax, employment and address records |
| Source of income | Contract, assets, work and payment information |
| Application | Application filed on time and exemption certificate |
| Ongoing compliance | Source-based income and expense records and document archive |
Does Providing Services to a Foreign Company from Türkiye Automatically Qualify for the Exemption?
No. Where the income is earned is determined by the statutory source rules. The client being foreign is not enough on its own.
Does the Exemption Grant a Twenty-Year Residence Permit?
No. The tax regime and the residence or work permit under the law on foreign nationals are separate procedures.
Distinguishing Foreign Payments from Foreign-Source Income
A payment coming from a company abroad or from a foreign bank account does not necessarily mean the income was earned abroad. Activity carried out in Türkiye, rights used there, or income linked to real estate in Türkiye are assessed under their own source rules. An exemption certificate is not a general exemption covering all Türkiye-source earnings.
The place of work, for whom and where the service is performed, any link to a business premises or permanent representative, the location of the property, and the transaction giving rise to the earnings should be documented. In mixed contracts, it may be necessary to allocate the price among different performances. The mere fact that an invoice is in foreign currency does not resolve the question of source.
Date of Residence and the File for the Previous Three Years
The review of residence and tax liability for the previous three calendar years is not limited to a passport entry-exit printout. Tax records, employment contracts, workplace and company activities, and residence documents are assessed together. Certain past income that the law permits must be kept apart from earlier activities that obstruct the benefit.
The fact that applications by persons who settle in the last two months of the year are subject to a special deadline does not mean that the starting conditions are postponed. The year from which the twenty-year period is counted, once the document is obtained, should also be recorded separately. Renewing the document should not be treated as a new right that restarts the exemption period.
Deductions and Foreign Tax on Mixed Income
The same person may have income taxable in Türkiye alongside foreign income covered by the exemption. In that case, expenses and deductions should be matched with the relevant income. Foreign tax relating to exempt earnings is not automatically credited against the tax on other earnings taxed in Türkiye.
If the conditions are lost, incorrect information is provided, or income is shown with the wrong source, the tax consequences are determined according to the nature of the case. The twenty-year period is not a tax immunity that is earned by itself and is unconditional. The annual control file should also cover changes in residence status and sources of income.
Decision to Make and File to Prepare Before Acting
Document the date of settling in Türkiye and the records of the prior period. Separate Türkiye-source income from foreign income covered by the exemption. Assess the application deadline, the allocation of expenses and the position of taxes paid in the foreign country together.