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Turkish Citizenship by Investment and Tax Residence

Turkish Citizenship by Investment and Tax Residence

Av. Serkan KARA, Serka Law Firm (Istanbul Bar, no. 53770)

Last reviewed: 28 October 2026 · Reviewed by Av. Serkan KARA

Turkish citizenship by investment does not by itself make the investor a Turkish taxpayer on what he earns abroad. Türkiye taxes on residence, and Article 4 of the Income Tax Law names two tests: a domicile in Türkiye, or a continuous stay of more than six months in a calendar year. What the passport does change is narrower, and most guides miss it: the shelter Article 5 gives foreigners who stay in Türkiye for rest, travel, study or a temporary assignment no longer covers a Turkish citizen, and Turkish inheritance and gift tax reaches property that belongs to Turkish citizens wherever it is. Since 2026 an investor who does move has a twenty-year exemption for his foreign income, on an application with a hard deadline, and a 1 per cent rate on the estate he leaves within that period.

The investor’s tax questions in seven lines

QuestionAnswerWhere it is written
Does the passport make me a Turkish tax resident?No. A domicile in Türkiye, or a continuous stay of more than six months in a calendar year, doesIncome Tax Law, Articles 3, 4 and 6
Does a long holiday in Türkiye count?For a foreigner, no. For a Turkish citizen it can, because the shelter in Article 5 names foreignersIncome Tax Law, Article 5; Law No. 6458, Article 3(1)(ü)
Is my foreign income taxed if I move?Exempt for twenty years, if I had neither a domicile nor a Turkish tax liability in the three prior calendar years and I apply in timeIncome Tax Law, Article 20/D; General Communiqué No. 333
When must I apply?By the end of the calendar year in which I became resident, or by the end of February of the next year if that was in November or DecemberGeneral Communiqué No. 333, Article 3(4)
Is my income from Türkiye covered?No. Rent, dividends and fees earned in Türkiye stay taxableGeneral Communiqué No. 333, Article 3(7)
Does Turkish inheritance tax reach my property abroad?Yes, for property belonging to a Turkish citizen and for what a Turkish citizen acquires abroad; not for a foreign heir domiciled abroad who receives property outside TürkiyeInheritance and Gift Tax Law, Article 1
Is there a lower rate for the investor who moves?1 per cent on property passing by inheritance from a person within the Article 20/D period; gifts keep the ordinary ratesInheritance and Gift Tax Law, Article 16, as amended by Law No. 7582

Does Turkish citizenship by investment make you a Turkish tax resident?

No. Article 3 of the Income Tax Law (Law No. 193) taxes the worldwide income of those settled in Türkiye, and Article 4 names who is settled: a person whose domicile is in Türkiye, and a person who stays in Türkiye continuously for more than six months in a calendar year, temporary departures not interrupting the stay. Domicile is the Civil Code’s: the place where a person lives with the intention of staying permanently, and no one has two at once (Turkish Civil Code, Article 19). A person who is not settled pays Turkish income tax only on income earned in Türkiye (Article 6).

Citizenship appears in neither test. A Turkish citizen living abroad is taxed as a non-resident on his Turkish income alone; the one exception in Article 3 is a citizen posted abroad by a Turkish public body or by an enterprise whose head office is in Türkiye. The short-term residence permit the investor takes before the citizenship application (Law No. 6458, Article 31(1)(j)) is not a test either.

What the passport changes: the six-month rule

Article 5 lists those who are not settled however long they stay: people who came on a defined and temporary assignment or for business, people who came for study, medical treatment, rest or travel, and people kept in Türkiye by detention, conviction or illness. Its opening words are “Aşağıda yazılı yabancılar”, the foreigners listed below, and Türkiye’s own residence sheet for the OECD’s Common Reporting Standard puts it the same way: “foreigners indicated below shall not be considered as resided in Türkiye, even if they stay in Türkiye for more than six months”. Turkish law defines a foreigner as a person with no citizenship bond with the Republic of Türkiye (Law No. 6458, Article 3(1)(ü)), so an investor who becomes a Turkish citizen is no longer one, whatever other nationality he keeps.

On the words of Article 5, then, an investor who spent seven continuous months of a year in Türkiye on holiday before his citizenship was not settled, and after it he is settled under Article 4, with his worldwide income within Turkish tax for that year unless the twenty-year exemption below applies. The test is a continuous stay within one calendar year, not 183 days across any twelve months, and a short trip abroad does not reset it. A spouse and children who acquired citizenship on the same application stand in the same position.

The twenty-year exemption for foreign income, from 2026

Article 20/D, added to the Income Tax Law by Law No. 7582 and applied to persons settled in Türkiye from 1 January 2026, exempts from income tax for twenty years the earnings and revenues earned outside Türkiye by a person who becomes settled, on condition that in the last three calendar years before that he had neither a domicile nor a tax liability in Türkiye. The Ministry of Treasury and Finance set its procedure in General Communiqué on Income Tax No. 333 (Official Gazette of 4 July 2026, No. 33300):

  • The investor must be settled in Türkiye on the day he applies (Article 3(2)).
  • He applies to the competent tax office and obtains its “Exemption Certificate for Earnings and Revenues Derived from Abroad” by the end of the calendar year in which he became settled, or, if he became settled in the last two months of a year, by the end of February of the next (Article 3(4)). In the Communiqué’s own example a person settled on 2 March 2028 who applies on 1 May 2030 gets no certificate.
  • A Turkish tax liability in the three prior years arising from rent, from movable capital income or from a capital gain does not bar the exemption (Article 20/D, second paragraph); one from wages or from a business does (the Communiqué’s Examples 6 and 7). The investor who bought his citizenship property and let it keeps the exemption open.
  • Only income earned outside Türkiye is exempt. Rent from a property in Türkiye, a dividend from a Turkish company and fees for work done in Türkiye stay taxable (Article 3(7), Examples 9 to 11). No return is filed for the exempt income, and none of it goes into a return filed for Turkish income (Article 3(6)).
  • Costs of the exempt income are not deducted, and foreign tax paid on it is not credited in Türkiye (Article 3(8) and (9)).
  • If the conditions turn out not to have been met, the certificate is cancelled and the tax is collected with a tax-loss penalty and late-payment interest (Article 5 and Example 12).
  • Only individuals benefit, not companies (Article 3(10)).

The Communiqué’s Example 13 answers a question the investor asks before he sends the money: a person domiciled in the United Arab Emirates and not settled in Türkiye who transfers USD 100,000 from abroad to his account at a bank in Türkiye, and sends there the rent of a property he owns in France, is taxed in Türkiye on neither (Article 6 of the Communiqué). The transfer made for a citizenship investment is not income.

Inheritance and gift tax follows the citizen

The Inheritance and Gift Tax Law (Law No. 7338) is the Turkish tax that turns on citizenship. Its Article 1 taxes property belonging to Turkish citizens, and property in Türkiye, that passes by inheritance or by any gratuitous transfer; it reaches property that Turkish citizens acquire abroad in the same ways; and it leaves out a foreigner not domiciled in Türkiye who acquires by inheritance or gift a Turkish citizen’s property situated outside Türkiye. For the investor’s family that means:

  • The estate of an investor who has become a Turkish citizen falls within the tax wherever the property is, for the heirs who are Turkish citizens, and the spouse and children who acquired citizenship on his application are Turkish citizens.
  • An heir who is a foreigner not domiciled in Türkiye pays nothing on property outside Türkiye; property in Türkiye is taxed whoever receives it.
  • When the investor, now a citizen, inherits from a parent abroad or receives a gift abroad, that acquisition falls within the tax.
  • Inheritance tax paid abroad on the foreign property is deducted from the taxable value together with the debts on that property, on proof and up to its value (Article 12(c) and (ç)). It is a deduction from the base, not a credit against the Turkish tax.

The rates rise by band (Article 16): on inheritance 1, 3, 5, 7 and 10 per cent, on gifts 10, 15, 20, 25 and 30 per cent, the gift rates halved for a gift from a mother, father, spouse or child. For 2026 the bands are the first TRY 3,000,000, the next 7,000,000, the next 15,000,000, the next 30,000,000 and the part above 55,000,000, and the inheritance share of each descendant, adopted children included, and of the spouse is exempt up to TRY 2,907,136, the spouse’s up to TRY 5,817,845 where there is no descendant (Article 4(b); General Communiqué on Inheritance and Gift Tax No. 57, Official Gazette of 31 December 2025, No. 33124). Law No. 7582 added one rate: for property passing by inheritance from a person benefiting from the Article 20/D exemption, within the period of that exemption, the rate is 1 per cent (Article 16, as amended). The text names inheritance alone, so a gift by the same person is taxed at the ordinary rates.

What happens to the investment’s own income

The income each route produces is earned in Türkiye, so it is Turkish income for a resident and a non-resident alike, and the twenty-year exemption does not reach it: rent from the citizenship property (on the property route page and the income tax page), interest on the lira deposit (on the bank deposit page), coupons on the government debt instruments (on the bond page), the gain on fund units (on the fund units page) and the private pension when the investor leaves the system (on the private pension page). A sale of the property after the three years raises its own question of capital gains.

The banks’ question: tax residence under the Common Reporting Standard

Under the OECD’s Common Reporting Standard a financial institution opening an account takes the holder’s self-certification of tax residence, and may not rely on one it knows or has reason to know is unreliable. The OECD keeps a table of residence and citizenship by investment schemes that pose a high risk to the Standard, those giving a personal income tax rate below 10 per cent on offshore financial assets without a physical presence of at least 90 days; Türkiye’s scheme was not on it when we read it on 20 October 2026. A Turkish passport is therefore no answer to the residence question a bank abroad asks; the investor’s residence under the tests above is.

Three claims this page corrects

  • “Türkiye taxes you after 183 days a year.” Article 4 asks for a continuous stay of more than six months within one calendar year, temporary departures included, and a domicile in Türkiye settles a person whatever the count of days.
  • “Inheritance and gift tax for those in the twenty-year exemption is a flat 1 per cent.” Article 16 as amended names transfers by inheritance; gifts keep the ordinary bands.
  • “Turkish inheritance and gift taxes reach a Turkish citizen’s worldwide assets whoever receives them.” The third paragraph of Article 1 leaves out a foreign heir or donee not domiciled in Türkiye who receives property outside Türkiye.

Sources

This article provides general information on Turkish law and is not legal advice. No attorney-client relationship is formed by reading it; such a relationship arises only through a signed engagement with Serka Law Firm.

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