New tax and administrative incentives have come to the fore in order to strengthen the investment environment in Turkey, increase foreign direct investments and support the international competitiveness of Istanbul Financial Center.<\/p>\n
Within the scope of the “Turkey Century: A Strong Center for Investment Program” announced by the President on April 24, 2026, it is aimed to expand the tax advantages granted to the institutions operating in the Istanbul Financial Center, to support transit trade activities, to reduce the corporate tax burden in terms of exporter and manufacturer-exporter institutions, to provide special tax facilities for people coming to Turkey from abroad and to simplify investment processes with the “One-Stop Office” model. In the following, the new incentive headings described are evaluated together with the current Istanbul Financial Center regime and the main issues to be considered in terms of companies and investors are discussed.<\/p>\n
Istanbul\u00a0 Financial Center (\u201cIFC\u201d) has a special legal and tax regime that promotes the provision of financial services on an international scale. In the current system, significant advantages are provided in areas such as financial service exports, BITT, stamp duty, fees, income tax and bookkeeping in foreign currency in terms of participants operating in IFC and meeting the relevant conditions.<\/p>\n
Within the scope of the new program announced, it is envisaged to make the IFC regime even more attractive, especially in terms of transit trade and intermediary activities for goods purchases and sales abroad. In the current practice, 50% of the earnings of the institutions operating in the IFC Region can be deducted from the corporate tax base from the fact that they sell the goods purchased from abroad or mediate the purchase and sale of goods abroad without bringing them to Turkey within the scope of their activities. In order to benefit from this discount, the earnings must be transferred to Turkey within the same year and the seller and buyer of the goods subject to the brokerage activity must not be in Turkey.<\/p>\n
With the newly announced program, it is planned to increase this discount rate from 50% to 100%. Accordingly, provided that the relevant regulation enters into force and the prescribed conditions are met, the corporate tax burden on income derived from such activities may be significantly reduced, and may even, in effect, be eliminated.<\/p>\n
One of the most striking aspects of the new stimulus package is that the tax advantage related to transit trade is not limited to Istanbul Financial Center only and is extended to institutions operating outside IFC. According to the statements, it is envisaged that 95% of the earnings of institutions engaged in transit trade activities outside the Istanbul Financial Center will be exempted from tax.<\/p>\n
This regulation can encourage companies residing in Turkey to construct their international trade operations through Turkey. This incentive may have significant consequences, especially in terms of the structures where the goods do not come to Turkey physically, but the commercial organization, financing, contract management or intermediary activity is carried out from Turkey.<\/p>\n
However, issues such as the scope of application of the said advantage, the conditions of use, the obligation to transfer the earnings to Turkey, the buyer-seller criteria, the document layout and the effects of transfer pricing will need to be clarified with the legal regulation and secondary legislation to be made.<\/p>\n
Another prominent topic within the scope of the program is to encourage global companies to move their regional management centers to Turkey.<\/p>\n
According to the statements, it is aimed to provide a strong tax advantage to companies managing their foreign operations from Turkey. In this context, it is planned that 100% of the earnings obtained within the Istanbul Financial Center and 95% of the earnings obtained outside the IFC can be deducted from the corporate income over the next 20 years. In addition, it is envisaged to provide wage exemptions to qualified personnel working in these structures under certain conditions.<\/p>\n
This regulation may constitute an important incentive mechanism for multinational companies to manage their regional operations in the Middle East, Europe, Africa, Turkish States or nearby geography from Turkey.<\/p>\n
However, the main issue to be considered here is the conditions under which the status of “regional administrative center” will be gained. The scope of the management activity, the quality of the personnel, the presence of decision-making functions in Turkey, the relationship with foreign group companies, the determination of service fees and the transfer pricing rules should be evaluated separately in practice.<\/p>\n
In Turkey, the general corporate tax rate is currently 25% and certain discounts are applied in terms of exporting institutions and manufacturing institutions. In the newly announced program, a stronger corporate tax reduction is foreseen for export and production-oriented companies.<\/p>\n
According to the statement, it is planned to reduce the corporate tax rate to 9%, especially for manufacturer-exporter institutions, and to 14% for other exporting institutions.<\/p>\n
This regulation can significantly reduce the tax burden of exporting companies. Especially for companies that carry out production and export together, the decrease in the effective tax rate may directly affect investment decisions, capacity increases, pricing strategies and international competitiveness.<\/p>\n
However, whether the discounted rates will apply only to export earnings, according to which criteria the manufacturer-exporter status will be determined, how the production and export earnings will be disaggregated, and whether they can be applied together with other existing incentive regimes will be clarified by the legal regulations to be made. Therefore, it will be important for companies to evaluate their activity, accounting and tax structures separately according to the new system after the regulation enters into force.<\/p>\n
Within the scope of the program, a remarkable incentive was also announced for individual investors, people in the high-income group and professionals living abroad.<\/p>\n
Accordingly, if people who live abroad and are not taxpayers in Turkey in the last 3 years come to Turkey, no tax is planned to be levied in Turkey for their foreign-origin income and earnings for 20 years. It has been announced that only the income of these people originating from Turkey will be taxed, and the inheritance tax will be applied at the rate of 1%.<\/p>\n
This regulation aims to make Turkey more attractive for qualified individual investors, entrepreneurs, senior managers and foreign income earners.<\/p>\n
However, in the implementation of this regime, it will be important how the tax residence of the person coming to Turkey will be determined, on what basis the condition of “not being a taxpayer in Turkey in the last 3 years” will be evaluated and which revenues will be considered as “income from abroad”. In addition, whether dividends, interest, capital gains or wage revenues obtained from foreign companies will be covered and how the double taxation prevention agreements will be implemented together with this regime will be clear with the regulations to be made. Therefore, this incentive will be particularly important in the areas of individual tax planning, family wealth management, heritage planning and investment migration.<\/p>\n
In the announced program, it is stated that the incentives for entrepreneurs and taxpayers serving customers abroad in the fields of architecture, engineering, software and similar services will also be expanded.<\/p>\n
In the current system, 80% of the earnings obtained from some services provided to customers abroad and benefited from abroad can be deducted from the income or corporate tax base under certain conditions. Within the scope of the new disclosure, it is aimed to enable all of these earnings to be deducted from the income and corporate tax base.<\/p>\n
This title is especially important in terms of software, engineering, design, architecture, consultancy, digital services and technology-oriented initiatives. It may be possible for companies established in Turkey or entrepreneurs planning to move to Turkey to evaluate their revenues from the services they provide to foreign customers under a more advantageous tax regime.<\/p>\n
In addition to tax incentives, administrative simplification of investment processes is one of the important topics of the program.<\/p>\n
According to the statements, a One-Stop Office model will be established in order to carry out large-scale and qualified international direct investment processes from a single center. This structure will work under the coordination of the Presidential Investment and Finance Office; It will allow transactions such as company establishment, work and residence permits, tax and SSI transactions, \u0130\u015eKUR processes, land, incentive and EIA permits to be followed from a single center.<\/p>\n
This practice is important in terms of reducing bureaucratic processes, shortening transaction times and increasing administrative predictability for foreign investors who want to invest in Turkey.<\/p>\n
For investors, not only the speed of tax rates but also the speed of permit processes, the clarity of administrative interlocutors, the transparency of application procedures and the predictability of implementation also play a decisive role in investment decisions. Therefore, the One-Stop Office model should be considered as one of the complementary elements of the stimulus package.<\/p>\n
In addition to the newly announced incentives, there are significant advantages already in place at the Istanbul Financial Center.<\/p>\n
According to the information in IFC official sources, all of the earnings obtained within the scope of financial service exports can be deducted from the corporate income in the determination of the corporate tax base until 22.06.2032. Monies received in favor due to transactions in the nature of financial services exports are exempted from BITT; transactions related to these activities are exempted from all kinds of fees, and papers issued for these transactions are exempted from stamp tax.<\/p>\n
In addition, income tax exemption is also applied in terms of personnel employed in IFC and having certain professional experience abroad. Accordingly, 60% of the wages of personnel with at least 5 years of professional experience abroad and 80% of the wages of personnel with at least 10 years of professional experience abroad are exempt from income tax. This exception is applied in terms of wage income of personnel who have not worked in Turkey in the last 3 years before starting to work in IFC.<\/p>\n
There are also fee and stamp duty exemptions in terms of the transactions related to the rental of the immovables in the IFC. In addition, some participants who receive a participant certificate and operate in IFC can keep their financial book records in foreign currency if the conditions are met.<\/p>\n
The new investment incentive package announced as of 2026 aims to make Turkey a more competitive investment center in terms of international capital, exports, transit trade, service exports and qualified labor force.<\/p>\n
It has been announced that it is planned to expand the existing tax advantages in Istanbul Financial Center, to include transit trade activities other than IFC within the scope of incentives, to bring lower corporate tax rates for exporting institutions to the agenda, to envisage long-term tax advantages for people coming to Turkey from abroad and to simplify investment processes with the One-Stop Office model, and to increase this discount rate from 50% to 100%. Accordingly, provided that the relevant regulation enters into force and the stipulated conditions are met, the corporate tax burden on income derived from such activities may be significantly reduced, and may even, in practice, be eliminated entirely.<\/p>\n
It has the potential to create remarkable opportunities for companies planning to invest in Turkey or to structure their activities through Turkey. However, since the final scope of the announced incentives will depend on the legal regulations and implementation principles that will enter into force, it is important to make legal and tax evaluations specific to concrete activities before investment decisions.<\/p>\n
However, the final effect of the described regulations will depend on the texts to be enacted and the principles of practice. For this reason, it is important for investors to make legal and tax evaluations specific to their activities before benefiting from the new incentives.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-55920","legal_developments","type-legal_developments","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments\/55920","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments"}],"about":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/types\/legal_developments"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/media?parent=55920"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}