Election economy commences: Warm welcome for hot money
As the election approaches, an omnibus bill aimed at accelerating the flow of hot money has been submitted to the Parliament (The Grand National Assembly of Türkiye). The package, which intends to increase foreign capital inflows, also includes a Wealth Amnesty arrangement.
The AKP has submitted an omnibus bill containing financial regulations to the Speaker of Parliament. The proposal includes new tax regulations and incentives aimed at attracting capital to the country.
Election preparations appear to be underway, with the package specifically featuring provisions aimed at attracting hot money into the country.
The first article of the 15-article bill contains regulations regarding the collection of public debts.
The repayment period for debts owed to the state is being extended from 36 months to 72 months. The proposal suggests raising the amount of debt that can be deferred without requiring collateral from 50,000 TL to 1 million TL.
The regulations introduce tax advantages for those repatriating foreign income to Turkey.
For individuals benefiting from the exemption under the Income Tax Law, a tax rate of 1 per cent will apply to property transfers occurring through inheritance during the exemption period.
Furthermore, income and earnings obtained abroad by natural persons who have newly settled in Turkey and have not been liable for tax in the last three years will be exempt from income tax for 20 years.
THE 8TH ASSET AMNESTY
The proposal introduces the eighth Asset Amnesty scheme, following the seven previous implementations between 2008 and 2022.
A new regulation is being introduced to bring unregistered assets held by individuals and legal entities, both domestically and abroad, into the economy.
Unlike previous regulations, a graduated tax system based on the commitment period is envisaged.
Accordingly, for declarations made by 31 July 2027, tax will be applied at rates ranging from 0% to 5%, depending on the duration for which the assets are held in financial instruments. Provided the conditions are met, no tax audit will be conducted on these assets.
If a commitment is made to hold the assets in this manner for at least five years, the tax rate will be applied at zero per cent.
If a commitment is made to hold them for at least four years, a 1 per cent tax will be levied; for at least three years, 2 per cent; for at least two years, 3 per cent; and for at least one year, 4 per cent. If no commitment regarding the holding period is made, the standard rate of 5 per cent will apply.
BRING IT BACK QUICKLY, LET’S MAKE PEACE
However, these rates will apply until the end of 2026. According to the regulation, the tax rate for those bringing in gold and foreign currency after 1 January 2027 will increase.
For declarations made between 1 January 2027 and 31 July 2027, the rates will be increased by half a percentage point.
The President may extend the deadline of 31 July 2027 by periods not exceeding six months at a time, up to a maximum of one year.
If the President extends the deadline, the rates for declarations made after 31 July 2027 will be increased by a further half-point, resulting in a total increase of one percentage point.
THE REQUESTED PRIVILEGE WAS GRANTED
Erdoğan of the AKP received Larry Fink, CEO of BlackRock—the world’s largest fund management company overseeing assets worth over 10 trillion dollars—at the Dolmabahçe Working Office on 27 March.
The meeting, which was also attended by Minister Şimşek, discussed investment opportunities in Turkey and global economic developments.
The timing of this meeting—held during a period when a massive outflow of hot money was occurring from Turkey amidst ongoing US and Israeli attacks on Iraq, and the Central Bank’s reserves were dwindling—was considered highly significant.
The fact that the bill was submitted to the Turkish Grand National Assembly (TBMM) following this meeting drew attention.
TAX-FAVOURED ‘Qualified Service Centre’
The definition of a ‘Qualified Service Centre’ is being introduced into legislation.
This status will be granted to capital companies operating in at least three countries and deriving 80% of their annual turnover from affiliated companies abroad.
An income tax exemption will apply to employees working in qualified service centres. The portion not exceeding three times the gross minimum wage will be exempt from income tax, whilst in the Istanbul Financial Centre, this will be five times the gross minimum wage.
The proposal allows deductions for transit trade, qualified service centres and income within the scope of the Istanbul Financial Centre to be deducted from the “domestic minimum corporate tax” base.
THE IMPACT OF THE CORPORATE TAX REDUCTION: 34 BILLION TL
The impact analysis of the draft law noted that the cost implications of many provisions could not be measured.
Only the cost impact of the corporate tax reductions was calculated.
Under the regulation, the general corporate tax rate of 25 per cent will be reduced by 16 percentage points to 9 per cent for manufacturers’ profits, and by 11 percentage points to 14 per cent for profits derived exclusively from exports by other exporting entities.
The impact of the corporate tax reduction on budget revenues is estimated to be 34 billion TL.
Note: This article is translated from the original article titled Seçim ekonomisine start: Sıcak paraya kucak açıldı, published in BirGün newspaper on May 6, 2026.
