Türkiye: tax, residence and foreign companies

Personal residence is not decided by the passport

The Income Tax Law distinguishes full liability from limited liability. Domicile in Türkiye or a continuous stay of more than six months in a calendar year can establish the relevant residence connection; temporary departures do not necessarily interrupt that period. Article 5 contains exceptions for specified temporary purposes, which must be applied to the facts.

A Turkish citizen living abroad is not automatically in the same position as a person settled in Türkiye. Equally, a foreign passport does not prevent resident taxation. Record homes, duties, travel and family arrangements and examine any applicable treaty. Keep employment, business, investment and property income separate; a foreign payer or bank account does not by itself determine source.

Qualifying arrivals can apply for the enacted 20-year foreign-income exemption

Article 20/D, enacted by Law 7582 in 2026, provides a 20-year foreign-income exemption for qualifying individuals treated as settled from 1 January 2026. The three preceding calendar years, specified prior-income exceptions, exemption certificate and application deadline must be reviewed. Final Communiqué 333 was published on 4 July 2026; this is an enacted regime, not a general territorial reclassification of Türkiye.

The exemption does not cover Turkish-source activity or confer an exemption on a company the individual owns. Review local work, corporate management and departure-country exposure separately. The dedicated foreign-income exemption guide explains the sequence and evidence file.

The legal centre or business centre can create company residence

GIB explains that a corporation with either its legal centre or business centre in Türkiye is fully liable on worldwide profits. The legal centre is the centre stated in the relevant constitutive documents. The business centre concerns where operations are actually concentrated and managed. A foreign registered office therefore does not conclusively establish foreign-only taxation.

For an owner-managed business, identify who approves major contracts, financing, budgets and operational decisions after relocation. Compare that factual record with the company’s constitution, directors and premises. A genuinely foreign company can still have Turkish-source income through local operations or a permanent establishment. The company’s liability, its shareholder’s receipts and any transfer-pricing obligations must be analysed separately.

CFC rules aggregate control and require several conditions

The statutory control test uses at least 50% of capital, dividend rights or voting rights held directly or indirectly by fully liable individuals and companies, separately or together. The highest relevant control during the period matters. Splitting interests between resident owners does not necessarily avoid the rule; GIB’s examples expressly aggregate corporate and individual interests.

Article 7 also tests at least 25% passive gross income, a foreign income/corporate tax burden below 10%, and gross revenue above the statutory TRY100,000 equivalent threshold. These conditions operate together. The law then addresses inclusion in a fully liable corporate shareholder’s tax base according to its participation. Distinguish people counted for control from the taxpayer receiving the attribution, and review the individual rules separately. Later distributions require checking for amounts already taxed.

The 100% services deduction is conditional, not a blanket exemption

The current GIB article 89 text records the 100% rate under Decision 11257 for the specified service deduction. Covered fields include software, design, engineering and several other listed activities. The rules address overseas customers, exclusive overseas benefit for the relevant service categories, and transfer of the eligible earnings to Türkiye by the applicable annual-return deadline.

Identify the precise statutory activity, contract, invoice recipient and use of the service. Keep bank evidence linking the earnings to the required transfer and allocate costs consistently. A deduction against eligible profit is not a waiver of every tax, employment charge or company obligation. Before comparing effective costs, test corporate minimum-tax rules where relevant, VAT, payroll, distributions and nonqualifying receipts. Do not apply an old 80% headline or a new 100% headline without reading the conditions.

How Offshore Capitalist can help

Share your current residence, nationality, business activities and intended changes through the inquiry form or WhatsApp. We can assess the cross-border issues, explain the work required and coordinate the agreed implementation. For this jurisdiction, local regulated work and government decisions remain with the relevant qualified providers and authorities. We confirm scope and fees before starting.