Turkey's 20‑year Foreign‑income Exemption and Asset Peace, How to Repatriate by 31 July 2027

Turkey’s Law No. 7582, published in the Official Gazette on 4 June 2026, has introduced two measures that fundamentally change the tax landscape for individuals relocating to the country: a 20‑year exemption from Turkish income tax on qualifying foreign‑source income and a time‑limited Asset Peace (Varlık Barışı) regime that allows offshore and undeclared domestic assets to be regularised through authorised banks and brokerages. The foreign‑income exemption is available to individuals who become Turkish tax residents and who were not resident or subject to tax in Turkey during the preceding three calendar years, while the Asset Peace repatriation window closes on 31 July 2027.

Together, Turkey’s 20‑year foreign‑income exemption and Asset Peace provisions create a combined incentive structure, reduced ongoing taxation on worldwide earnings plus a one‑off mechanism to declare offshore assets at rates as low as 0 %, that positions the country as a serious competitor to established non‑dom regimes in Europe and beyond.

Key takeaways at a glance:

• What changed: Law No. 7582 exempts qualifying new Turkish tax residents from income tax on foreign‑source income for 20 years and opens a parallel Asset Peace declaration window.
• Who benefits: Individuals who were not tax resident or liable to tax in Turkey in the three calendar years before they establish Turkish tax residence.
• Critical deadline: Asset Peace declarations must be filed with an authorised Turkish bank or brokerage by 31 July 2027. Rates range from 5 % (standard) down to 0 % for assets committed to government instruments or five‑year deposits.
• Action required: Individuals and their advisers should assess eligibility, prepare supporting documentation, and engage Turkish counsel before the repatriation window closes.

What Changed, Law No. 7582, Dates and Headline Benefits

Legal Source and Enactment

Law No. 7582 was adopted by the Turkish Grand National Assembly and published in the Official Gazette on 4 June 2026 (Gazette No. 33270). The legislation amends several existing statutes, most importantly the Income Tax Law (Gelir Vergisi Kanunu), to insert a new temporary provision granting the Turkey 20‑year foreign income exemption and to establish a fresh iteration of the Asset Peace framework. The Turkish Revenue Administration (Gelir İdaresi Başkanlığı) confirmed the law’s entry into force through a formal announcement and has issued implementing guidance clarifying procedural requirements for both measures.

For practitioners, the statutory text is the controlling authority. Interpretive guidance from the Revenue Administration and from implementing communiqués should be monitored closely, as further procedural detail, including form templates and bank reporting obligations, may evolve before the 31 July 2027 deadline.

High‑Level Summary of Benefits

The two pillars of Law No. 7582 operate in tandem but address different objectives:

• 20‑year foreign‑income exemption. Qualifying individuals who become Turkish tax residents are exempt from Turkish income tax on foreign‑source income and gains for a period of 20 years from the date they establish tax residence. The exemption covers dividends, interest, capital gains, rental income, royalties and other income categories, provided the income is sourced and earned outside Turkey.
• Asset Peace (Varlık Barışı 2026). A separate, time‑limited regime that allows both residents and non‑residents to declare previously undisclosed offshore assets, and certain unrecorded domestic assets, to authorised Turkish financial intermediaries. Declarations are subject to a one‑off tax at tiered rates, and the regime provides a degree of protection against retrospective tax assessments on the declared assets.

Industry observers expect these combined provisions to attract high‑net‑worth individuals from jurisdictions that have recently tightened non‑dom rules, notably the United Kingdom and, to a lesser extent, Portugal, as well as members of the Turkish diaspora holding substantial assets abroad. The likely practical effect will be a significant influx of capital declarations before the repatriation window closes on 31 July 2027.

Who Qualifies for Turkey’s 20‑Year Foreign‑Income Exemption, Residency and Precondition Tests

Eligibility for the exemption hinges on two interlocking requirements: becoming a Turkish tax resident and satisfying a three‑year lookback test that confirms prior non‑residency.

Tax residence under Turkish law. An individual becomes a tax resident in Turkey if they establish their legal domicile (ikametgâh) in the country or remain in Turkey for a continuous or aggregate period of more than six months within a calendar year. Temporary absences for travel do not interrupt the six‑month count. In practical terms, securing a residence permit and registering an address with the population directorate (Nüfus Müdürlüğü) will typically trigger domicile‑based residence, while physical presence exceeding six months triggers presence‑based residence.

Three‑year lookback rule. The individual must not have been resident in, or subject to, Turkish income tax during the three calendar years immediately preceding the year in which they become tax resident. This means an individual establishing residence in 2026 must demonstrate that they were not a Turkish tax resident in 2023, 2024 or 2025 and were not otherwise liable to Turkish income tax during those years.

Documenting non‑residency. The following checklist identifies the types of evidence advisers should assemble to support a claim of prior non‑residency:

• Tax‑residency certificates from the individual’s country or countries of residence during the lookback period.
• Copies of foreign tax returns filed during each of the three lookback years.
• Passport stamps, travel records or immigration status documents confirming physical presence outside Turkey.
• Evidence that no Turkish tax return was filed and no Turkish tax identification number (vergi kimlik numarası) was active during the lookback period.
• Formal deregistration from the Turkish population register, if the individual was previously registered.

Practical residency scenarios. A digital nomad who has lived in Portugal for the last four years and now relocates to Istanbul will satisfy both tests, provided they establish Turkish domicile or exceed six months of physical presence and can evidence non‑residency in Turkey for 2023–2025. A retired executive returning to Turkey after a decade abroad meets the criteria straightforwardly. An employee on a short‑term assignment, however, should exercise caution: if their stay is characterised as temporary under Turkish law, they may not qualify as a full tax resident, and consequently may not trigger the exemption.

Asset Peace (Varlık Barışı) in Turkey, Scope, Rates and Deadlines

What Assets Can Be Declared

The Asset Peace regime under Law No. 7582 covers a broad range of asset categories. Declarations may be made in respect of:

• Offshore financial assets: cash deposits, foreign‑currency holdings, securities (equities, bonds, fund units), gold and other precious metals held outside Turkey.
• Offshore real property and other tangible assets: immovable property held abroad, subject to the declaration and valuation requirements set by implementing communiqués.
• Unrecorded domestic assets: certain assets located within Turkey that have not previously been reflected on the taxpayer’s balance sheet or tax filings, including undisclosed cash, gold and securities.

All declarations must be made through an authorised Turkish bank or brokerage house. The declarant identifies the asset, provides supporting valuation documentation, and the financial intermediary processes the declaration and collects the applicable one‑off tax.

Rates, Holding Incentives and the 31 July 2027 Deadline

The headline declaration rate under Asset Peace Turkey is 5 %, but the law provides significant incentives for declarants who commit to holding the declared assets in Turkey for specified periods. The rate steps down in proportion to the length of the holding commitment, reaching 0 % for assets committed to Turkish government debt instruments, sukuk or five‑year time deposits. The statutory framework also provides that the base rate may increase by half a percentage point for declarations made during certain later filing windows, creating an additional reason to declare early within the repatriation window.

The statutory window for Asset Peace declarations runs until 31 July 2027. This is a hard legislative deadline. Declarations made after this date will not benefit from the preferential rate structure. Individuals who intend to declare offshore assets under this regime should plan their filings well in advance, particularly where complex multi‑jurisdictional asset structures require coordination with foreign banks and custodians.

Procedural Steps and Timeline to Declare Offshore Assets in Turkey by 2027

The process of filing an Asset Peace declaration involves several discrete steps. A disciplined timeline reduces the risk of missing the 31 July 2027 deadline and ensures procedural compliance with Turkish Revenue Administration guidance.

Step‑by‑step procedure:

1. Engage Turkish tax counsel. Before initiating any declaration, retain specialist legal and tax advisers who can assess eligibility, identify qualifying assets, and coordinate with the receiving bank or brokerage.
2. Select an authorised financial intermediary. Choose a Turkish bank or licensed brokerage that is operationally set up to receive Asset Peace declarations. Confirm the institution’s KYC documentation requirements in advance.
3. Prepare asset inventory and valuations. Compile a comprehensive list of declarable assets with supporting documentation, account statements, title deeds, custodian confirmations, and obtain independent valuations where required.
4. Complete the declaration form. Working with counsel, complete the required declaration form specifying the asset type, value, source of funds, and the chosen holding option (immediate withdrawal, or commitment to government instruments / time deposits).
5. Submit declaration and pay the one‑off tax. File the declaration through the financial intermediary. The applicable tax rate is collected at source. Obtain and retain official receipts confirming the declaration, the rate applied, and the holding commitment.
6. Transfer assets to Turkey. For offshore assets, initiate the transfer of funds or securities to the Turkish intermediary. Allow sufficient lead time for international wire transfers and custodian processing.
7. Retain records for audit purposes. Maintain a complete file, declaration forms, payment receipts, bank confirmations, supporting valuations, and proof of asset transfer, for a minimum of five years (or longer if a holding commitment applies).

Indicative timeline: For a straightforward cash declaration, the process from initial counsel engagement to completed declaration may take two to four weeks. For complex portfolios involving securities, property or multi‑jurisdictional custodians, allow eight to twelve weeks. Given the 31 July 2027 deadline, individuals with complex structures should begin preparations no later than early 2027.

Tax Consequences, Reporting and Cross‑Border Interactions Under Turkey’s Foreign‑Income Exemption

Understanding the interaction between the Asset Peace one‑off tax, the 20‑year foreign‑income exemption, and an individual’s ongoing reporting obligations is critical for compliant planning.

Is foreign income taxable in Turkey? Under standard Turkish tax law, resident individuals are taxed on their worldwide income. However, for individuals who qualify for the Turkey 20‑year foreign income exemption under Law No. 7582, foreign‑source income and gains earned outside Turkey are exempt from Turkish income tax for the full 20‑year period. This exemption covers all standard income categories sourced abroad, dividends, interest, capital gains, rental income, employment income earned abroad, and royalties, provided the income is genuinely foreign‑sourced.

Worked examples:

• Foreign dividends. An individual who becomes a Turkish tax resident in 2026 and holds a portfolio of US equities receives USD 200,000 in dividend income during 2027. Under the exemption, this income is not subject to Turkish income tax. However, US withholding tax (typically 15 % under the US–Turkey double taxation agreement) will still apply at source.
• Capital gains on foreign securities. The same individual sells UK shares for a GBP 500,000 gain. The gain is exempt from Turkish income tax under the 20‑year exemption. Any UK capital gains tax liability depends on the individual’s UK tax status, if they have ceased UK residence, the gain may also be outside the UK tax net.
• Overseas rental income. Rental income from a property in Germany remains exempt from Turkish income tax but is subject to German income tax under domestic German rules and the Germany–Turkey DTA.

Double taxation treaty considerations. Turkey maintains an extensive network of double taxation agreements. The exemption does not override treaty obligations in the source country. Where a DTA applies, the source country typically retains the right to tax certain income categories (dividends, interest, royalties, immovable property income). Because the income is exempt in Turkey, no Turkish foreign‑tax credit arises, meaning the source‑country tax is the final cost. Advisers should model the net tax position under each relevant DTA before relocation.

Reporting. Even where income is exempt, qualifying individuals should confirm whether Turkish filing obligations, including the annual income tax return, still apply. Early indications suggest that exempt income must be disclosed in the return but is excluded from the taxable base; however, implementing communiqués from the Revenue Administration should be monitored for definitive guidance.

Practical Compliance Risks and Mitigation When Repatriating Assets to Turkey

The Asset Peace regime provides a powerful regularisation mechanism, but it does not eliminate all compliance risk. Advisers and declarants should be alert to the following hazards:

• AML / money‑laundering scrutiny. Turkish banks are subject to stringent anti‑money‑laundering obligations. A large Asset Peace declaration will trigger enhanced KYC due diligence. If the bank is not satisfied with the source‑of‑funds documentation, it may refuse to process the declaration.
• Beneficial ownership transparency. Assets held through offshore structures (companies, trusts, foundations) must be linked to a natural‑person declarant. Failure to demonstrate beneficial ownership may invalidate the declaration.
• Timing risk. Missing the 31 July 2027 deadline is irrecoverable. There is no statutory provision for late declarations.
• Future legislative change. Previous iterations of Varlık Barışı have been followed by legislative amendments. Early indications suggest the current regime is intended to be a final iteration, but this cannot be guaranteed.
• Source‑country exit taxes and reporting. Transferring assets out of a foreign jurisdiction may trigger exit taxes, capital gains charges, or reporting obligations (for example, US FBAR or FATCA reporting). Coordinate with source‑country advisers before initiating transfers.

Mitigation checklist: engage specialist Turkish counsel before any declaration; prepare robust source‑of‑funds documentation; stage declarations to manage bank KYC workflows; and confirm exit‑tax and reporting obligations in every relevant source jurisdiction.

Conclusion, Act Before the Repatriation Window Closes

Turkey’s 20‑year foreign‑income exemption and Asset Peace regime represent a rare alignment of long‑term tax relief and short‑term repatriation incentives. For individuals who satisfy the three‑year lookback test and are willing to establish Turkish tax residence, the combined benefit, two decades of exemption on foreign‑source income plus the ability to declare offshore assets at rates as low as 0 %, is substantial. The critical constraint is time: the Asset Peace declaration window closes on 31 July 2027, and the half‑point rate increases for later filing periods mean that acting sooner yields better outcomes.

Wealth managers, tax advisers and high‑net‑worth individuals should begin eligibility assessments and asset inventories now, and should engage qualified Turkish tax counsel to navigate the procedural and compliance requirements of Turkey’s 20‑year foreign‑income exemption and Asset Peace framework before the opportunity expires.

Last reviewed: 17 July 2026. This article will be updated if new implementing communiqués are issued by the Turkish Revenue Administration.

Sources

1. Turkish Grand National Assembly, Law No. 7582
2. Turkish Revenue Administration (Gelir İdaresi Başkanlığı), Law No. 7582 Announcement
3. Official Gazette / Lexpera, Law No. 7582 Full Text (Gazette No. 33270)
4. EY Tax News, Turkiye Introduces New Personal Tax Regime
5. Oznur & Partners, Turkey’s Asset Repatriation Programme 2026
6. PwC Tax Summaries, Turkey Individual Significant Developments