Zero tax regime for high earners
Under the new regulation, announced under the name of ‘investment attraction’—tax exemptions for overseas earnings have been expanded. Whilst the tax burden on companies has been reduced to zero in many cases, the burden on public revenues has been shifted onto the shoulders of workers
Economy Service
The first legal steps towards the plan announced last week by AKP President Recep Tayyip Erdoğan to turn the country into a tax haven continue to emerge. The way has been paved for foreign capital to invest in the country through tax incentives and exemptions. Whilst tax exemptions granted to companies headquartered abroad have been expanded, the rates of these reductions have been increased. Employers will now be able to benefit more easily and to a greater extent from these incentives.
The AKP government, which is making the public foot the bill for the economic crisis it has created, continues to pamper employers. The regulations, which the regime refers to as the ‘Strong Hub for Investments in the Turkish Century’ and which Erdoğan announced as a new economic programme by stating, ‘We are determined to turn Turkey into a global hub of attraction’, have deepened tax injustice.
A Presidential Decree published in the Official Gazette yesterday introduced massive changes to tax advantages on overseas earnings. Exemptions and deduction rates for affiliate profits and service exports have been significantly increased.
Flexibility has been introduced in the taxation of dividends received from overseas companies, which will please investors. The requirement for a 50% shareholding to qualify for an exemption on overseas affiliate profits has been reduced to 20%.
CAPITAL IS BEING EXEMPTED FROM TAX
The 50% exemption rate applied to profits derived from overseas subsidiaries has been raised to 80%, provided the profits are repatriated to Turkey by the date of the tax return.
In an economy driven by service growth, the highest-earning service exporters have effectively been exempted from tax. For businesses providing services abroad—ranging from software to healthcare, and from architecture to education—the tax burden has been reduced to zero. The income and corporation tax reduction previously applied to 80% of earnings has been increased to 100% by presidential decree. The requirement to issue invoices in the name of the overseas customer and to transfer the earnings to Turkey by the tax return deadline remains in place. The exemption covers architecture, engineering and design; software, data processing, data analysis and storage; medical reporting, product testing and certification; call centre and accounting services; and education and healthcare services.
Under the new regulations, the amount of tax that investors in the country would have to pay on profits from overseas partnerships and income from service exports has been almost entirely abolished.
The government’s next step will be to transform the Istanbul Financial Centre into a tax-free zone. Furthermore, under the planned incentives for foreign capital, individuals who have not been tax residents in Turkey for the past three years and who reside abroad will not be taxed on income and gains derived from abroad for a period of 20 years if they relocate to Turkey. Funds, gold and security deposits held abroad may also be transferred to the country tax-free and without any questions asked.
Note: This article is translated from the original article titled Çok kazanandan sıfır vergi rejimi, published in BirGün newspaper on May 1, 2026.
