Turkey has introduced two significant tax measures intended to encourage inward mobility and capital inflows. Published in the Official Gazette on 4 June 2026, the changes include a 20‑year exemption from Turkish income tax on qualifying foreign‑source income and gains earned by certain individuals who become Turkish tax residents, as well as a new asset repatriation, or “Asset Peace,” regime. The Asset Peace regime allows individuals and entities to declare certain foreign‑held and unrecorded domestic assets, generally subject to a one‑off five percent tax on the declared value, with the possibility of reduced rates if specified investment and holding conditions in Turkey are satisfied.1
WHY THIS MATTERS
These developments may be relevant for:
- Internationally mobile employees and executives considering moving to Turkey, particularly those with significant foreign investment or business income;
- Employers and global mobility program managers who may need to reflect the new rules in assignment planning, cost projections, and tax equalisation arrangements; and
- Individuals and entities with undeclared foreign or domestic assets looking to regularise their position under a time limited, preferential regime.
Potential implications include:
- A lower effective Turkish tax burden on foreign-source income for up to 20 years for eligible individuals, which may influence decisions to relocate to or remain in Turkey;
- An opportunity to declare and formalise foreign and certain unrecorded domestic assets at a relatively low flat tax cost; and
- A need for careful coordination with home country tax rules, double tax treaties, and internal mobility policies to manage tax, compliance, and reputational risks.
Key Features – 20-Year Exemption for Foreign-Source Income
Qualifications
An individual may benefit from the 20-year exemption if they become tax resident in Turkey and during the three calendar years preceding the year in which they become resident, they:
- Did not have a domicile in Turkey; and
- Were not subject to Turkish tax liability or were subject to Turkish tax only in respect of:
- Rental income from Turkish property;
- Investment income from Turkish sources; or
- Capital gains from Turkish assets.
Limited Turkish‑source income in the pre‑arrival period does not prevent an individual from qualifying for the exemption
For qualifying individuals, the foreign-source income and gains obtained outside Turkey are exempt from Turkish income tax for 20 years from the time the individual becomes tax resident.
These amounts:
- Do not need to be reported in a Turkish annual income tax return; and
- Are not included in the Turkish tax base, even if the individual files a return for other income (for example, Turkish-source employment or rental income).
Other details
- Expenses or costs connected with the exempt foreign income cannot be deducted against taxable income in Turkey.
- Foreign taxes paid on the exempt foreign income cannot be credited against Turkish income tax.
- If the tax authorities later determine that the conditions were not met, unassessed Turkish tax is treated as tax loss, and additional tax assessments and interest may arise.
- The Ministry of Treasury and Finance is authorised to issue detailed rules on how the exemption is expected to operate in practice (for example, documentation requirements and registration processes).
Key Features – Asset Repatriation (“Asset Peace”) Regime
Scope of assets
The regime applies to foreign-held assets owned by individuals or legal entities, including:
- Cash, gold, foreign currency;
- Securities and other capital market instruments; and
- Unrecorded domestic assets owned by Turkish income or corporate taxpayers, such as cash, gold, foreign currency, securities and other capital market instruments physically in Turkey but not recorded in statutory books.
Timing and process
Declaration deadline:
- Assets can be declared until 31 July 2027.
- The President may extend this deadline by up to one year in total.
Foreign assets:
- Must be declared to a Turkish bank or intermediary institution by 31 July 2027.
- Must be transferred to accounts in Turkey or physically brought into Turkey within two months from the declaration date.
- Physically imported assets must be supported by customs documentation, which is shared with the Turkish Revenue Administration.
Unrecorded domestic assets:
- Must be declared to a bank or intermediary by 31 July 2027.
- Must be deposited with the bank/intermediary on the declaration date.
Tax rates
Standard rate:
- Banks and intermediaries collect a five percent tax on the declared value of the assets as a one time payment.
- This tax is reported and paid to the tax office by the 15th day of the month following the declaration.
Reduced rates: If the declared assets are held in specified instruments in Turkey (e.g. time deposits, certain government bonds/lease certificates, venture capital investment funds) for at least:
- 5 years – 0%
- 4 years – 1%
- 3 years – 2%
- 2 years – 3%
- 1 year – 4%
Additional increases:
- Declarations made between 1 January 2027 and 31 July 2027 are subject to an additional 0.5 percentage points on each rate.
- If the declaration period is extended beyond 31 July 2027, a further 0.5 percentage point increase applies (total +1 point over the base rate).
No stamp duty is charged on declarations or commitment letters used to qualify for the reduced rates.
KPMG INSIGHTS
The 20-year foreign income exemption could significantly reduce Turkish tax exposure for eligible individuals with substantial foreign investment or business income, potentially making Turkey more attractive as a base for senior executives, entrepreneurs, investors, and returning Turkish nationals.
Individuals and employers might wish to consider the following:
- Individuals could assess how this interacts with home country tax rules, residency tests, and double tax treaties. In some cases, ongoing tax obligations in the home country may limit the practical benefit of the Turkish exemption.
- Employers could review assignment policies, cost projections, and tax equalisation arrangements to determine whether the new rules could support more cost efficient long term or permanent moves to Turkey.
The asset repatriation (“Asset Peace”) regime offers a structured, time limited opportunity to declare and regularise previously undeclared foreign or domestic assets and to benefit from relatively low flat tax rates, potentially as low as 0 percent where investment and holding conditions are met.
From a global mobility perspective, organisations may wish to:
- Identify employees or senior leaders planning to relocate to Turkey who could be affected by the 20-year exemption, and align mobility, reward, and tax strategies accordingly;
- Consider whether the asset repatriation regime is relevant for key executives, shareholders, or founders whose asset positions may have wider corporate or reputational implications; and
- Monitor secondary regulations and guidance from the Ministry of Treasury and Finance, which are expected to clarify practical aspects such as documentation, reporting, and interaction with anti-avoidance rules.
Given the complexity and potential cross border interactions, individuals and employers may wish to seek professional advice (for details on the GMS team in Turkey, please see the Contacts section) before relying on these measures or making significant changes to their tax or mobility arrangements.
ENDNOTE:
1 Republic of Türkiye Official Gazette (in Turkish), “No. 33270,” published on 4 June 2026.
Contacts
Disclaimer
The information contained in this newsletter was submitted by the KPMG International member firm in Turkey.
GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
© 2026 KPMG Bağımsız Denetim ve Serbest Muhasebeci Mali Müşavirlik A.Ş, a Turkish Corporation and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.