On Friday, Turkey’s president Recep Erdogan unveiled a package of tax reforms. If parliament gives the green light, the country could look completely different to wealthy expats and international businesses.
The key proposal: a 0% tax rate on foreign income and capital gains for 20 years for anyone who moves to Turkey and hasn’t been a tax resident there for the previous three years.
Under this plan, the tax base would be limited exclusively to income sourced inside Turkey. Everything earned abroad — dividends, capital gains, passive income — would stay completely off Turkey’s tax radar for two decades.
In addition, the reform introduces a flat 1% inheritance and gift tax, no matter the value of the assets being transferred. Currently, rates range from 1% to 30%.
Right now, people who become Turkish tax residents pay a progressive tax of 15% to 40% on their worldwide income, with only partial relief available under double taxation treaties.
What Can Change for Business
The current standard corporate tax rate is 25%. The reform proposes:
- 9% for manufacturing exporters
- 14% for all other export companies
Companies based in the Istanbul Financial Center would get near-total exemption on income from transit trade. International firms that move their regional headquarters to Turkey could enjoy up to 20 years of tax breaks on foreign operations, plus extra benefits for their employees.
Citizenship Program and What Lies Ahead
Turkey’s citizenship by investment program offers a direct path to a passport with a property purchase starting at $400,000. Until now, this was seen mainly as a “neutral passport” or a “Plan B.” But that could now change. Turkey may well become a full-fledged destination for relocating your life, your business, and for optimising your taxes.
Astons supports investors at every step of getting a Turkish passport through real estate investment — from finding the right property to handling the paperwork, completing the purchase, and submitting the application. Get in touch with us for a personal consultation and answers to any questions you may have.
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