Turkey Strengthens Its Tax Attractiveness for Foreign Investors in 2026
Turkey continues to enhance its fiscal competitiveness through a series of reforms designed to attract foreign investment, international businesses, and global entrepreneurs.
Published in the Official Gazette on April 30, 2026, Presidential Decree No. 11257 introduces significant amendments to several exemption and deduction provisions under the Turkish Income Tax Law and Corporate Tax Law.
These new Turkey tax incentives aim to encourage capital inflows, increase the repatriation of foreign income, and strengthen Turkey’s position as a leading destination for international business and investment.
Turkey Reduces Ownership Requirements for Foreign Dividend Exemptions
One of the most notable changes concerns dividends received from foreign companies.
Under the previous rules, individuals seeking to benefit from the Turkey income tax exemption on dividends received from foreign entities were required to hold at least 50% of the paid-in capital of the foreign company.
Under the new regulation, Turkey has reduced this ownership threshold from 50% to 20%, provided that at least half of the dividend income is transferred to Turkey.
This amendment significantly broadens access to the exemption and may encourage more investors to relocate assets and income streams to Turkey.
Turkey Increases Tax Deductions for Services Rendered Abroad
Another important development under the new Turkey tax reform in 2026 concerns income generated from services provided outside Turkey.
The deductible portion of foreign service income transferred to Turkey has been increased from 80% to 100%.
This means that eligible taxpayers operating internationally may benefit from a full deduction on qualifying foreign-sourced service income, provided the income is transferred to Turkey in accordance with the applicable rules.
The measure reinforces Turkey’s ambition to attract international consultants, technology firms, service providers, and globally active entrepreneurs.
Enhanced Corporate Tax Exemptions for Foreign Subsidiary Income
Turkey has also introduced favorable changes regarding foreign subsidiary income.
Previously, companies generally needed to hold at least 50% of a foreign subsidiary to qualify for certain corporate tax exemptions.
Under Presidential Decree No. 11257:
- The minimum ownership requirement has been reduced from 50% to 20%;
- The exemption rate has been increased from 50% to 80%;
- The exemption may apply provided that the relevant income is transferred to Turkey before the deadline for filing the corporate tax return.
These changes strengthen Turkey’s attractiveness as a regional holding and investment hub for multinational groups.
New Conditions for Corporate Tax Deductions on Foreign Services in Turkey in 2026
The decree also introduces new requirements regarding foreign service income earned by corporations.
To benefit from the applicable Turkey corporate tax deduction, companies must now transfer the entirety of the income generated abroad to Turkey.
In exchange for this stricter transfer requirement, the deductible amount has been increased to 80% of the relevant income.
The objective is to encourage the repatriation of earnings while continuing to offer substantial tax advantages for internationally active businesses operating from Turkey.
Why These Turkey Tax Incentives Matter
The new measures demonstrate Turkey’s commitment to creating a more attractive environment for:
- International investors;
- Holding companies;
- Multinational groups;
- Entrepreneurs;
- Export-oriented businesses;
- Technology and consulting firms;
- High-net-worth individuals relocating to Turkey.
By lowering ownership thresholds and increasing exemption rates, Turkey is making it easier for both individuals and corporations to benefit from favorable tax treatment on foreign income and overseas investments.
Turkey Continues to Position Itself as a Regional Business Hub
These reforms form part of a broader strategy aimed at increasing foreign direct investment and strengthening Turkey’s role as a bridge between Europe, Asia, the Middle East, and Africa.
For businesses considering expansion into Turkey, the new Turkey tax incentives may create additional opportunities for tax planning, corporate structuring, and international growth.
Effective Date of the New Turkey Tax Rules
Presidential Decree No. 11257 entered into force on April 30, 2026, the date of its publication in the Official Gazette.
The amended exemption and deduction rules apply to income and earnings relating to tax periods beginning on or after January 1, 2026.
The latest Turkey tax reform introduces several attractive incentives for international investors, multinational businesses, and globally active entrepreneurs.
With reduced ownership thresholds, higher exemption rates, and expanded deductions for foreign income, Turkey continues to strengthen its position as a competitive destination for international investment and business operations.
Companies and individuals with international activities should carefully assess how these new Turkey tax incentives may impact their investment and tax planning strategies.
