(TURKEY) — Turkey’s Parliament approved a tax package that grants eligible new residents a 20-year Turkish tax break on foreign-source income and sets a 1% inheritance and gift tax rate for qualifying individuals.

The measure, as described, would allow people who qualify to live in Turkey without Turkish tax on foreign-source income and capital gains for 20 years. Income earned from Turkish sources would still face Turkish tax.

Eligibility turns on recent tax residence. The incentive applies to individuals who have not been Turkish tax residents for the past three years, making it a tax residency incentive rather than a universal exemption.

Parliament’s approval places Turkey among the jurisdictions using tax policy to attract internationally mobile wealth. The package targets people with offshore earnings or globally diversified investments who want to relocate while limiting tax exposure on non-Turkish income.

Istanbul’s financial ecosystem forms part of that appeal. The package, if implemented as described, gives prospective residents access to a large economy while preserving Turkish taxation on income generated inside the country.

The distinction between foreign and domestic income sits at the center of the proposal. Foreign-source income and capital gains fall within the holiday, while Turkish-source income remains taxable under Turkish rules.

That structure narrows the benefit to people whose earnings arise abroad. Someone whose income comes mainly from activities, investments, or business interests outside Turkey would stand to gain more than a resident earning primarily inside the country.

The package also adds a low transfer-tax provision. Qualifying individuals would face a 1% inheritance and gift tax rate, a feature that broadens the offer beyond annual income tax treatment.

Taken together, the 20-year duration and the 1% rate create a long-term framework rather than a short relocation perk. Investors weighing a move often look for stability over many years, especially when wealth, family planning and cross-border holdings are involved.

Turkey’s proposal may strengthen its position against relocation destinations that offer shorter-term or less certain tax advantages. A 20-year Turkish tax break is unusually long in political and financial planning terms, giving potential residents a horizon that extends well beyond a typical incentive period.

Still, the package does not erase home-country tax obligations. U.S. citizens remain taxable by the IRS on worldwide income regardless of Turkish residency, so a move to Turkey would not end their U.S. tax exposure even if Turkey exempted their foreign-source income.

The same logic applies more broadly to anyone taxed on worldwide income by a home country. Turkey’s measure is residency-based, not a global exemption, and the effect on any individual would depend on how domestic law in another country interacts with Turkish treatment.

That point matters for tax planning because a Turkish exemption does not necessarily equal an overall exemption. A person may reduce or eliminate Turkish tax on offshore income yet still face filing duties, tax liability, or both elsewhere.

Investors with offshore earnings appear to be the clearest potential beneficiaries. The package could materially reduce the tax burden for internationally mobile individuals whose income is mainly earned outside Turkey, especially where capital gains and non-Turkish income make up a large share of annual receipts.

New residents would also need to meet the residence test embedded in the law. The three-year lookback means the incentive is designed for people entering, or re-entering, Turkish tax residence after a period abroad, not for everyone already living under the Turkish tax system.

That framing gives the measure a selective character. It rewards a change in tax residence and channels the benefit toward newcomers, rather than offering a blanket tax holiday to all residents.

Foreign-source income sits at the center of the policy’s appeal because it captures the earnings profile common among globally mobile households. Investment portfolios, offshore business income and gains realized outside Turkey would all matter more under this structure than local salary or domestic business revenue.

Capital gains also widen the package’s reach. People whose wealth is tied to internationally diversified assets often focus as much on eventual gains as on annual income, and Turkey’s proposed treatment addresses both categories.

Turkish-source income remaining taxable preserves a boundary that tax authorities can enforce domestically. Residents who work, invest, or operate businesses inside Turkey would still face local taxation on those earnings, even while enjoying relief on income arising abroad.

The inheritance and gift provision may draw a different group of applicants as well. Families considering relocation often examine transfer taxes alongside income taxes, particularly where large estates or intergenerational planning are part of the move.

How much the package changes behavior will depend on the enacted legal text and implementing rules. Those details will determine the exact scope of covered income, how qualification works in practice, and how broadly the benefit applies over the full 20-year period.

Until those rules are in place, advisers and prospective residents can identify the broad lines but not every operational detail. The current description points to a durable residency incentive with two pillars: a tax holiday for foreign-source income and capital gains, and a 1% inheritance and gift tax rate for those who qualify.

People weighing a move to Turkey would need to assess their own residency history and income mix before counting on the benefit. Someone who has not been a Turkish tax resident for the past three years and earns most income abroad fits the design more closely than someone rooted in Turkish-source earnings.

That leaves Turkey with a package aimed squarely at mobile capital and mobile people. Parliament has approved a plan that offers a 20-year Turkish tax break on foreign-source income, preserves tax on Turkish-source income, and adds a 1% inheritance and gift tax rate that could reshape how some investors and new residents judge the country as a base.