Turkey's 20-year Foreign‑income Exemption and Asset Peace: How Advisers Should Model Residency, Repatriation and the 31 July 2027 Window

Turkey’s 20-year foreign-income exemption and Asset Peace regime, enacted through Law No. 7582 and published in the Official Gazette (Resmî Gazete) on 4 June 2026, represent two of the most consequential private-client reforms the country has introduced in over a decade. The law creates a dual opportunity: qualifying individuals who become new Turkish tax residents can shelter foreign-source income and gains from Turkish income tax for up to twenty years, while a parallel Asset Peace window allows both natural and legal persons to declare offshore assets at a flat 5 % rate, or at 0 % if funds are committed to specified domestic instruments, with declarations accepted until 31 July 2027.

For private-client advisers, family offices and trustees managing cross-border estates, the interaction between these two measures raises immediate compliance sequencing decisions, not least because declared assets must physically enter Turkey within two months of each declaration.

Legal Basis and Headline Features of Law No. 7582

Law No. 7582, formally titled Bazı Kanunlarda Değişiklik Yapılmasına Dair Kanun (Law on Amendments to Certain Laws), was adopted by the Grand National Assembly on 21 May 2026 and published in Resmî Gazete No. 33270 on 4 June 2026. The law amends several pieces of existing legislation, but two provisions are of primary interest to inheritance and private-client practitioners.

First, the law inserts Provisional Article 20/D into the Income Tax Law, creating the 20-year tax exemption Turkey now offers to qualifying new tax residents on their foreign-source income and earnings. Second, separate articles establish the Asset Peace declaration and repatriation regime, setting a flat 5 % rate on declared offshore assets and a reduced 0 % rate where funds are committed to Turkish government instruments or held in five-year domestic deposits.

The President retains the power to extend the declaration window by up to one year beyond the initial 31 July 2027 deadline. Advisers should monitor official announcements from the Revenue Administration (GİB) for any exercise of that extension power.

Official Sources and Where to Read the Law

The full text of Law No. 7582 is available on the Resmî Gazete website. The GİB has published a supporting announcement confirming the law’s scope and administrative implementation dates. Practitioners should also consult KPMG’s GMS flash alert and the EY Tax News briefing for English-language interpretive commentary that cross-references the official Turkish text.

How the 20-Year Foreign-Income Exemption Actually Works

Provisional Article 20/D introduces a regime under which individuals who are deemed to have taken up Turkish tax residence, and who were not previously domiciled in or subject to income tax in Turkey, can benefit from a full income tax exemption on qualifying foreign-source income for a continuous period of twenty years from the date their Turkish tax residence begins.

What Counts as Foreign-Source Income?

The exemption applies to income and gains that arise outside Turkey. In practical terms, this covers the categories most relevant to high-net-worth individuals and family offices:

• Dividends from non-Turkish companies and funds.
• Interest earned on deposits or bonds held outside Turkey.
• Capital gains on the disposal of non-Turkish securities, real estate or business interests.
• Rental income from properties located outside Turkey.
• Royalties and licence fees sourced from non-Turkish intellectual property arrangements.

Income that is generated within Turkey, such as rent from an Istanbul apartment or trading gains on Borsa Istanbul, falls outside the exemption and remains subject to standard Turkish income tax rates.

Who Is a “New Tax Resident”?

The exemption is reserved for individuals who satisfy the “new Turkish tax resident” test. Industry observers expect the practical qualification criteria to operate as follows:

• No prior Turkish domicile or habitual residence. The individual must not have been domiciled in Turkey or treated as a Turkish tax resident during a defined look-back period prior to the effective date of their new residence.
• No prior Turkish tax liability. There must be no outstanding or historical Turkish income tax assessment against the individual.
• Active registration. The individual must register with the Turkish tax office and obtain a tax identification number following their arrival.

The provision entered into force on 4 June 2026, the date of publication of Law No. 7582. According to KPMG’s flash alert, the exemption applies to individuals deemed to be resident in Turkey as of January of the relevant tax year onwards. Advisers should confirm the precise effective-date mechanics against the official GİB guidance and any subsequent communiqués.

For a client with a non-Turkish dividend portfolio generating the equivalent of TRY 10 million per year, the 20-year tax exemption Turkey now provides could shelter that entire income stream from Turkish income tax, a cumulative saving that, depending on applicable marginal rates, could be highly material over the life of the exemption. However, advisers must weigh that saving against the costs and obligations of establishing genuine Turkish tax residence, including potential loss of tax residence status, and associated treaty benefits, in the client’s current jurisdiction.

Asset Peace Turkey: Declaration, Rates and Eligible Assets

The Asset Peace regime operates independently of the 20-year exemption, though many clients will consider both measures simultaneously. Asset Peace allows both natural persons and legal entities to declare assets held offshore that have not previously been reported to the Turkish tax authorities. The regime provides a regularisation pathway at preferential rates.

Eligible Assets and Excluded Items

Based on the law and leading practitioner commentary, the following asset categories are generally eligible for declaration under the Asset Peace regime:

• Cash and foreign currency held in overseas bank accounts.
• Gold and precious metals held outside Turkey.
• Securities, including equities, bonds and fund units, held in foreign brokerage or custody accounts.
• Other capital market instruments as defined under Turkish capital markets legislation.

Advisers should verify whether digital assets such as cryptocurrencies fall within scope, as official guidance may refine the eligible categories. Assets located within Turkey that have been omitted from balance sheets or financial records may also qualify under separate provisions of the same law, practitioners should distinguish between onshore reconciliation and offshore repatriation carefully.

How to Submit a Declaration

Declarations are made to the relevant tax office. The process typically requires:

• Completed declaration form identifying each asset, its location, and its value (in the original currency and TRY equivalent).
• Supporting documentation, bank statements, custody reports, title documents or valuation certificates as applicable.
• Payment of the applicable rate, either 5 % of the declared value (flat rate) or commitment to the 0 % route by placing funds in prescribed domestic instruments.

Declarations are accepted until the 31 July 2027 repatriation deadline. There is no minimum declaration threshold specified in the law, though advisers should confirm whether implementing regulations introduce any de minimis requirements. The Asset Peace regime does not provide blanket immunity for non-tax criminal offences, advisers must verify the scope of protection with qualified Turkish counsel before any declaration is submitted.

The Two-Month Physical Repatriation Rule: Operational Sequencing and Practical Risk

Perhaps the most operationally demanding feature of the Asset Peace regime is the requirement that declared assets must physically move into Turkey within two months of the declaration date. This is not merely a reporting obligation, it is a condition for the declaration to take full effect. Failure to complete the physical repatriation within the two-month window could, in the worst case, invalidate the declaration’s tax benefits entirely.

For family office repatriation planning in Turkey, this two-month physical repatriation rule creates several practical risks that advisers must anticipate and manage.

• Banking processing times. Cross-border wire transfers, particularly those involving large sums or multiple correspondent banks, can take several business days. Transfers from jurisdictions with enhanced due diligence requirements may take longer.
• Custody and securities settlement. If the declared assets are securities rather than cash, the transfer process involves re-registration with a Turkish custodian, which may require additional documentation and take several weeks.
• FX conversion timing. Converting large foreign currency holdings into TRY, or transferring them as FX into a Turkish bank account, may be affected by daily transaction limits, central bank reporting requirements and market liquidity.
• Gold and physical assets. Transporting physical gold or precious metals into Turkey involves customs declarations, insurance, secure logistics and potential import duties, all of which add time.

If Funds Are Already in Transit

Advisers managing clients whose funds are already moving should follow a strict sequencing protocol:

1. Do not file the declaration until the sending bank confirms the transfer has been initiated and provides an estimated settlement date that falls well within the two-month window.
2. Obtain MT103 or SWIFT confirmation as documentary evidence of the transfer date and route. This creates an auditable trail linking the declaration to the physical repatriation.
3. Build in a buffer. If the estimated settlement date falls within the final two weeks of the two-month window, consider delaying the declaration or splitting it into tranches to reduce risk.
4. Consider staged declarations. Rather than declaring the full portfolio at once, submit partial declarations aligned with confirmed transfer schedules. This reduces the risk that a delayed transfer invalidates the entire declaration.

Early indications suggest that the Revenue Administration will require evidence of physical receipt by a Turkish bank or custodian, not merely evidence of dispatch, to satisfy the two-month requirement. Advisers should confirm this interpretation directly with the relevant tax office.

Turkey’s 20-Year Foreign-Income Exemption and Asset Peace: 0 % vs 5 % Modelling

The choice between the 0 % route and the 5 % flat rate asset declaration is one of the most consequential planning decisions clients will face under the Asset Peace regime. The following comparison table summarises the key trade-offs.

How to Commit to Domestic Instruments

To qualify for the 0 % repatriation rate, the declared funds must be placed into instruments specified by the Treasury or held in a domestic bank deposit for a minimum of five years. The likely practical effect is that clients choosing this route will need to coordinate with their Turkish bank or custodian before filing the declaration, to confirm that the prescribed instrument is available, that the bank will accept the incoming funds, and that the commitment documentation meets regulatory requirements.

Early Redemption and Penalties

The terms governing early access to committed funds will depend on the specific instruments and any implementing regulations published by the Treasury and Banking Regulation and Supervision Agency (BDDK). Industry observers expect that breaking the commitment early, whether by withdrawing deposits or selling government instruments before the five-year term, will trigger a recapture of the tax benefit, potentially at the full 5 % rate plus interest. Advisers should obtain written confirmation from the holding bank before a client commits to the 0 % route.

Tax Residency Sequencing: How to Model Qualification Before Relocating

For clients who wish to combine the 20-year tax exemption Turkey now offers with the Asset Peace repatriation opportunity, the sequencing of residency establishment is critical. A misstep in timing, such as registering for tax residence too early or too late, could disqualify the client from one or both regimes.

The recommended sequencing for a new Turkish tax resident planning to relocate is as follows:

1. Obtain a tax clearance certificate from the current jurisdiction of residence, confirming the client’s tax status and departure date.
2. Secure the appropriate Turkish visa and residence permit. Note that a residence permit and tax registration are distinct processes, the former is managed by the Directorate General of Migration Management, while the latter requires registration at the local tax office (vergi dairesi).
3. Register at the Turkish tax office and obtain a tax identification number (vergi kimlik numarası). This registration date is the likely trigger for the start of the 20-year exemption period.
4. Confirm “new tax resident” eligibility by providing documentary evidence of no prior Turkish domicile or tax liability, including, where possible, a written confirmation from the GİB that no prior tax records exist.
5. Once residency is confirmed, proceed with any Asset Peace declarations as a separate exercise, ensuring the two-month physical repatriation timeline is manageable.

Common Pitfalls for Returning Turkish Nationals or Dual Nationals

Individuals who hold Turkish citizenship but have lived abroad for many years may assume they qualify as new tax residents. However, if they were ever domiciled in Turkey or had a Turkish tax identification number in the past, they may fail the “no prior Turkish tax liability” test. Dual nationals should commission a formal records search with the GİB before making any relocation decision. The consequences of an incorrect assumption could include full exposure to Turkish income tax on worldwide income, the opposite of the intended benefit.

Inheritance and Succession Considerations When Repatriating Assets

Repatriating assets to Turkey under the Asset Peace regime has direct implications for inheritance law and inheritance tax in Turkey. Once assets are physically located within Turkey and held in Turkish bank accounts or custody, they fall squarely within the Turkish taxable estate for inheritance and gift tax purposes.

Does Repatriation Create a New Turkish Taxable Estate?

Yes. Assets repatriated under the Asset Peace regime will be treated as part of the individual’s Turkish estate upon death. This means they will be subject to Turkish inheritance tax at the applicable rates, and their distribution will be governed by Turkish succession rules unless a valid cross-border estate plan provides otherwise.

Advisers should take the following steps immediately upon or before repatriation:

• Review and update wills. Any existing will, whether Turkish or foreign, should be reviewed to ensure it accounts for the newly repatriated assets. Where a client has wills in multiple jurisdictions, coordination is essential to avoid conflicts. See our guide on how to claim inheritance in Turkey for procedural context.
• Evaluate nominee and trust structures. Assets previously held through nominee accounts or trust arrangements may need restructuring upon repatriation. Turkey does not recognise common-law trusts for domestic legal purposes, so trustee-held assets require careful handling.
• Consider the partition implications. For families with multiple heirs, repatriated assets will be subject to Turkish forced heirship rules. Our guide on how to partition an inheritance in Turkey explains the applicable framework.
• Model the inheritance tax cost. Calculate the potential inheritance tax exposure on the repatriated portfolio and compare it with the tax position had the assets remained offshore. This analysis should inform both the quantum declared and the choice between the 0 % and 5 % routes.

Practical Checklist and Sample Timeline for Advisers

The following timeline provides a working framework for advisers managing a client through the combined 20-year exemption and Asset Peace process. Dates should be adjusted based on each client’s circumstances.

Emergency Checklist If the Deadline Is Imminent

If the 31 July 2027 repatriation deadline is approaching and a client has not yet acted, the following emergency steps should be prioritised:

1. Engage Turkish tax counsel and a receiving bank immediately, confirm they can process the declaration and incoming transfer within the remaining time.
2. File only for assets where the physical repatriation can be completed within the two-month window, do not declare assets that cannot realistically arrive in time.
3. Initiate wire transfers before filing the declaration, so the two-month clock starts only once funds are already in transit.
4. Monitor for any presidential extension of the 31 July 2027 deadline, but do not rely on an extension that has not yet been announced.
5. Consult an inheritance lawyer in Turkey for estate and succession implications of the repatriated assets.

Conclusion: Recommended Next Steps for Advisers and Clients

Turkey’s 20-year foreign-income exemption and Asset Peace regime present a rare convergence of relocation incentive and asset regularisation opportunity. For the right client, a genuinely new Turkish tax resident with substantial foreign-source income and offshore assets requiring regularisation, the combined benefit is significant. However, the operational demands are real: the two-month physical repatriation window, the 0 % vs 5 % commitment decision, and the inheritance tax consequences of bringing assets onshore all require careful, sequenced planning.

Advisers should take three immediate steps. First, verify whether the client can satisfy the “new tax resident” test under Provisional Article 20/D. Second, sequence any Asset Peace declarations to ensure the two-month repatriation window is operationally achievable, filing no later than May 2027 to preserve a buffer. Third, model the 0 % domestic instrument route against the 5 % flat rate, weighing liquidity needs, estate planning objectives and the client’s long-term residency intentions. Turkey’s 20-year foreign-income exemption and Asset Peace framework will reward advisers who plan early and penalise those who leave compliance to the final weeks.

Sources

1. Resmî Gazete, Law No. 7582 (4 June 2026)
2. Revenue Administration (GİB), Announcement on Law No. 7582
3. KPMG, GMS Flash Alert: Turkey’s New 20-Year Exemption and Asset Peace
4. EY Tax News, Türkiye Personal Tax Regime Briefing
5. Bilgener, Law No. 7582 Practitioner Note
6. STEP, Turkey Grants 20-Year Income Tax Exemption
7. Grant Thornton Türkiye, Provisions of Turkey Tax Amnesty Law