The two legal steps
- Presidential Decree No. 11257 (Official Gazette, 30 April 2026): higher deduction and exemption rates for service exports, foreign dividends and foreign participation earnings. It applies to income earned on or after 1 January 2026.
- Law No. 7582 (adopted on 21 May 2026, published in the Official Gazette No. 33270 on 4 June 2026): transit trade, Qualified Service Centers, the IFC and the 20-year foreign income exemption for individuals.
Presidential Decree No. 11257: service exports and foreign income
| Item | Before | From 1 January 2026 |
|---|---|---|
| Service export earnings (ITL Art. 89, CITL Art. 10) | 80% of earnings deductible | 100% deductible if all earnings are brought to Türkiye by the tax return deadline |
| Individuals: dividends from foreign companies (ITL Art. 22) | Half exempt, under certain conditions | 50% exempt if the individual holds at least 20% and brings the income to Türkiye by the tax return date |
| Companies: foreign participation earnings (CITL Art. 5) | Exempt only with a 50% stake and a tax burden of at least 15% abroad | 80% exempt with a 20% stake; the 15% (in some cases 10%) tax burden test still applies and the funds must be brought to Türkiye |
The service export deduction covers services provided to clients abroad, such as architecture, engineering, software, design, education and healthcare. With the full deduction, the tax burden on these earnings falls to zero, as long as the conditions are met. In all three cases, the key condition is that the money is actually transferred to Türkiye on time.
Law No. 7582: transit trade and the Istanbul Financial Center
Law No. 7582 introduces a tiered corporate tax deduction for profits from transit trade and international purchase-sale mediation:
- Inside the IFC: companies holding an IFC Participant Certificate can deduct 100% of these profits, which amounts to a full exemption.
- Outside the IFC: transit trade carried out elsewhere in Türkiye qualifies for a 95% deduction.
The law also extends the IFC’s existing incentives: the 100% corporate tax deduction on financial service export income now runs until 2047 instead of 2031, and the staff income tax exemption is open to all IFC participants. Our IFC guide covers the details.
Law No. 7582: other measures
- Qualified Service Centers (regional headquarters): groups that run regional headquarters or group service functions from Türkiye can deduct their foreign-source income for 20 tax periods: 100% for IFC participants, 95% elsewhere. The center must be active in at least three countries, earn at least 80% of its revenue from foreign related parties and bring the income to Türkiye by the corporate tax return date.
- New residents: individuals who become Turkish tax residents after having no domicile or tax liability in Türkiye in the previous three years are exempt from Turkish tax on their foreign-source income for 20 years, with a flat 1% inheritance tax. An Exemption Certificate must be obtained from the tax office in time. See our guide to the 20-year exemption.
Who should review their position
- Trading companies and groups that run transit trade or international purchase-sale mediation.
- Companies exporting architecture, engineering, software, design, education or healthcare services.
- Turkish holding companies with foreign subsidiaries, and individuals with foreign shareholdings.
- Multinational groups considering a regional headquarters or shared service center in Türkiye, inside or outside the IFC.
- Executives and investors planning to move to Türkiye.
What to do now
- Map which income streams fall under the decree and plan the transfer of funds to Türkiye before the tax return deadline.
- Check shareholding percentages and the foreign tax burden of subsidiaries against the new 20% and 15% tests.
- Model the effect of an IFC structure on transit trade and regional headquarters profits, and check the Qualified Service Center conditions.
- If you are relocating, apply for the Exemption Certificate within the deadline.
Frequently asked questions
Are these measures already law?
Yes. The service export, foreign dividend and foreign participation changes are in force through Presidential Decree No. 11257. The transit trade, Qualified Service Center, IFC and new-resident measures are in force through Law No. 7582, published on 4 June 2026. The reduced corporate tax rates for exporters that were announced with the package are not part of Law No. 7582.
What happens if the earnings are not brought to Türkiye in time?
The higher deduction or exemption is not available. The funds must be transferred to Türkiye by the date the tax return for the relevant year is due.
From when do the decree rates apply?
To income earned on or after 1 January 2026, so they are first reflected in the returns for the 2026 tax year.
Plan for the 2026 incentives.
Level International’s Tax Advisory team reviews your structure, models the benefits of the decree and Law No. 7582 and plans the transfer of funds to Türkiye.
This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.