Turkish President Recep Tayyip Erdoğan has said his government would offer 20-year tax breaks on foreign-sourced income and earnings from companies managing overseas operations from Turkey as part of a planned legislative package aimed at drawing foreign-held assets, exporters and corporate headquarters into the country.
Erdoğan announced the measures Friday at an investment event in İstanbul, saying the government would soon send the package to parliament to make Turkey more attractive to investors.
The plan includes a 20-year exemption from Turkish tax on foreign-sourced income and gains for people who have lived abroad and have not been tax residents in Turkey for the past three years.
“We will only tax their income inside the country, if any,” Erdoğan said, according to a transcript published by his ruling Justice and Development Party (AKP).
The package also targets companies managing overseas operations from Turkey. Erdoğan said income from such operations managed from the İstanbul Financial Center would be fully deductible from corporate income for 20 years, while companies outside the center would be allowed to deduct 95 percent.
The İstanbul Financial Center is a government-backed business district opened in 2023 as part of Erdoğan’s effort to turn Turkey’s largest city into a finance and corporate management hub.
The package would also cut corporate tax for manufacturing exporters to 9 percent and reduce the rate for other exporting companies to 14 percent, Erdoğan said.
The measures come as Turkey seeks foreign currency inflows after years of high inflation, pressure on the lira and investor concern over economic policy and the rule of law.
Erdoğan also said the government would allow money, gold and securities held abroad to be brought into Turkey at a low tax rate. Turkish media reports said the rate could be 2 to 3 percent and that declared assets would not trigger tax inspections or assessments beyond the assets brought into the country.
The proposal resembles previous “asset peace” programs used by Turkey to encourage people and companies to repatriate assets held abroad. Critics have said such programs risk rewarding undeclared wealth while placing a heavier burden on ordinary taxpayers.
Erdoğan said the measures were meant to strengthen Turkey’s investment environment at a time when regional conflict has increased risks for energy, trade, tourism and transportation.
Turkey, which imports most of its energy, has faced added pressure from the Iran conflict because higher oil and gas prices can increase the current account deficit and feed inflation.
The government has promoted Turkey as a supply, logistics and manufacturing hub between Europe, the Middle East and Central Asia, but investors have also raised concerns over inflation, currency volatility and political pressure on courts, media, the opposition and civil society.