Law No. 7582 explained: Türkiye's 20-year foreign income exemption

On 4 June 2026 the Turkish Official Gazette published Law No. 7582, and with it the most consequential personal tax reform the Mediterranean has seen in a decade. The headline provision, a new article in the Income Tax Law, exempts qualifying foreign-sourced income of new tax residents from Turkish income tax for twenty years.

The scope is broad. Foreign dividends, interest, rental income from property abroad, capital gains on foreign assets, pensions and business profits earned outside Türkiye all qualify. For twenty years, none of it is subject to Turkish income tax. Exempt income does not even have to be reported in the annual Turkish return.

The conditions

Eligibility turns on a clean three-year history. You must have had no Turkish domicile and no Turkish tax liability in the three calendar years before becoming tax resident. Prior passive income touchpoints, a holiday rental you once declared for instance, do not automatically disqualify you, but the residency test is strict.

The regime applies to individuals who become Turkish tax residents from 1 January 2026 onwards. Tax residency itself follows the classic tests: more than 183 days of presence in a calendar year, or establishing your domicile, your settled home base, in Türkiye.

The two limits people miss

First, costs connected to exempt income cannot be deducted against Turkish taxable income. Second, foreign tax paid on exempt income cannot be credited in Türkiye. Both follow logically from the exemption, but they matter for structuring: there is no double-dipping between the exempt and taxable sides of your affairs.

The third point is more fundamental: the exemption covers foreign-sourced income only. Turkish income, including rent from a Turkish property, remains taxable under normal rules. Your Bodrum villa is an asset inside the Turkish system; your foreign portfolio is what the regime protects.

What it means in practice

For a family with, say, EUR 2 million of annual dividend and interest income from foreign holdings, the arithmetic is straightforward: under the regime, Turkish income tax on that income is zero, for twenty years, with no annual lump sum to pay for the privilege. Italy would charge EUR 300,000 a year for a comparable outcome. Greece EUR 100,000. Türkiye charges nothing beyond the ordinary costs of living where you now live.

The regime rewards early, well-documented moves. Residency needs to be genuine and demonstrable, the three-year lookback needs to be clean and the departure from your current tax jurisdiction needs to be handled as carefully as the arrival. That last part is where most planning effort belongs.