Significant amendments regarding income tax, corporate tax, foreign investments and the Istanbul Financial Center regime have entered into force with Law No. 7582 (the “Law”), published in the Official Gazette dated 4 June 2026. In this context, important tax advantages and incentives are introduced particularly for international companies, regional service center structures, Istanbul Financial Center participants and individuals planning to relocate to Turkey. A summary of these amendments is provided below:
1. Foreign-Source Income Exemption for Individuals Relocating to Turkey
With the addition of Provisional Article 20/D to the Income Tax Law, income and earnings derived outside Turkey by individuals meeting certain conditions are exempt from income tax for a period of 20 years following their relocation to Turkey. In order to benefit from the exemption, the individual must not have had a domicile in Turkey or been subject to tax liability in Turkey during the last three calendar years preceding the date on which such individual is deemed resident in Turkey. No annual income tax return will be filed with respect to such income and, where an annual tax return is filed due to other income, such income will not be included therein.
This provision will apply to individuals who are deemed resident in Turkey as of 1 January 2026.
2. Introduction of the “Qualified Service Center” Status
With the new amendment introduced to the Foreign Direct Investment Law, the concept of a “Qualified Service Center” has been defined for the first time. Under the new regime, a new incentive framework has been established for companies providing finance, accounting, risk management, human resources, data analytics, technology and digital transformation, strategic consultancy and similar services to group companies from Turkey.
In order to benefit from this status, companies must be part of a group operating in at least three different countries and derive at least 80% of their annual revenues from affiliated companies located abroad.
a. Corporate Tax Advantage for Qualified Service Centers
Pursuant to the amendment introduced to the Corporate Tax Law, 95% of the income derived abroad by Qualified Service Centers exclusively within the scope of such activities may be deducted from the corporate tax base. The deduction will be available for 20 fiscal periods commencing from the fiscal period in which the relevant activities begin. For Qualified Service Centers operating within the Istanbul Financial Center and companies operating in certain industrial zones, the deduction rate may be applied as 100%.
The provision will apply to corporate earnings relating to taxation periods commencing as of 1 January 2026, starting with tax returns required to be filed as of 1 July 2026.
b. Wage Tax Exemption for Qualified Service Personnel
The portion of the wages of qualified service personnel employed by Qualified Service Centers up to three times the gross minimum wage is exempt from income tax. For centers operating in certain industrial zones and within the Istanbul Financial Center, this threshold will be applied as five times the gross minimum wage.
3. Expansion of the Deduction for Foreign Trade Income
The corporate tax deduction applicable to income derived from the purchase and sale of goods abroad without such goods being brought into Turkey, as well as from intermediary activities relating to the purchase and sale of goods abroad, has been increased to 95%. For Istanbul Financial Center participants and companies operating in certain industrial zones, this rate may be applied as 100%. In order to benefit from the deduction, the relevant income must be transferred to Turkey by the deadline for filing the relevant corporate tax return.
The provision will apply to corporate earnings relating to taxation periods commencing as of 1 January 2026, starting with tax returns required to be filed as of 1 July 2026.
4. 12.5% Corporate Tax Rate for Manufacturing and Agricultural Production Income
With the amendment made to Article 32 of the Corporate Tax Law, the corporate tax rate applicable to income derived from manufacturing activities by corporations holding an industrial registry certificate and actively engaged in manufacturing activities, as well as income derived from agricultural production activities, has been determined as 12.5%.
This provision will apply to income derived in the 2027 and subsequent taxation periods.
5. New Asset Repatriation Regime
The Law introduces a new asset repatriation regime. Accordingly, cash, gold, foreign currency, securities and other capital market instruments located abroad, as well as certain assets located in Turkey but not recorded in the statutory books, may be declared before the relevant banks and intermediary institutions until 31 July 2027.
Under the regime, a tax of 5% is generally imposed on the declared assets. However, the applicable tax rate may be reduced to as low as 0% if such assets are committed to be maintained for specified periods in time deposit accounts, government debt securities, lease certificates or venture capital investment funds.
It is further stipulated that no tax examination or tax assessment will be conducted with respect to the declared assets, provided that the notification, transfer, payment and other conditions set forth in the Law are fulfilled.
In this respect, the regime aims to encourage the formal recording of certain domestic and foreign assets while also providing tax certainty, subject to the satisfaction of the applicable conditions. The regime entered into force on the date of its publication and declarations may be made until 31 July 2027.
6. Strengthening of the Istanbul Financial Center Regime
Law No. 7582 significantly extends the duration of tax incentives available under the Istanbul Financial Center (“IFC”) regime. In this context, the application period of certain tax advantages granted to IFC participants has been extended from 2031 to 2047, while the duration of certain incentives has been increased from five years to twenty years.
The Qualified Service Center regime introduced by the Law also expands the scope of activities that may benefit from incentives available within the IFC. Accordingly, Qualified Service Centers operating within the IFC and meeting the relevant requirements may benefit from corporate tax advantages of up to 100% in respect of income derived from services provided abroad and may benefit from such advantages for twenty fiscal periods.
These amendments indicate that the IFC is intended to be positioned not only as a center for banks and financial institutions, but also as a platform through which multinational companies may conduct regional management and service activities. In this regard, it is important to assess the Qualified Service Center regime together with the incentives available under the IFC framework.
Conclusion
When assessed as a whole, the amendments introduced by the Law demonstrate Turkey’s intention to attract regional management, financing and service activities of multinational companies. In particular, the introduction of the Qualified Service Center regime, the tax advantages granted to such centers and the long-term extension of the incentives available under the Istanbul Financial Center regime indicate a strengthening of Turkey’s policy to position itself as a regional hub for management, service and financial activities. The amendments may also create new opportunities for multinational companies considering establishing regional operations or intra-group service centers in Turkey.
