Everything You Need To Know About Tax in Turkey

With one foot in the West and one in the East, Turkey offers a strong geographical foundation for foreign citizens looking to invest or relocate while maintaining easy access to both continents.

The country also offers a favorable tax system, which has only become more competitive following the May 2026 updates.

In this guide, we’ll provide a detailed overview of how tax in Turkey works, so that you can confidently protect and grow your wealth while optimizing your tax burden. We’ll explain:

• The overall tax system in Turkey
• Income tax and how it operates
• Taxation for foreigners

Turkey Tax System Overview

Turkey has a layered tax system that combines income-based taxes, such as corporate and personal income taxes, with transaction-based taxes, such as VAT, property taxes, and banking fees.

Liability is primarily decided by residency status, the nature of economic activity, and the source of income taxes. Typically, organizations and individuals face different tax obligations depending on whether the profit is generated domestically or abroad.

Does Turkey Have Income Tax?

Turkey imposes income tax for both residents and non-residents who earn taxable income within the country. Turkey recognizes two types of income tax: personal income tax on profits sourced from employment and non-employment.

Personal income tax in Turkey covers earnings within a single calendar year sourced from:

• Agricultural profits
• Business profits
• Salaries and wages
• Investment income

All of these are charged at a progressive rate, meaning that as you advance through the brackets, your tax obligations grow. The rates go from 15% to 40% as follows:

Taxable Income in Turkish Lira (TRY)	Tax Rate
0–190,000	15%
190,000–400,000	20%
400,000–1,500,000	27%
1,500,000–5,300,000	35%
5,300,000 or over	40%

Importantly, these brackets also apply to non-employment income, which includes profits from rentals and dividends. The only notable difference is that the cap for the 27% bracket is lowered to 1 million TRY, and that the 35% bracket also starts at that number. 

Aside from income tax, Turkey’s taxation system includes other taxes that may apply depending on your assets, business activities, and transactions. These include:

1. Capital gains tax
2. Corporate tax
3. Banking and insurance tax
4. Property tax
5. Inheritance and gift tax

Capital Gains Tax

Turkey imposes a capital gains tax on the sale of assets that have appreciated, such as stocks, real estate, and other investments. It’s considered a type of personal income tax, and applies the same progressive 15%–40% rate depending on the profit.

Since it’s treated as part of personal income, capital gains tax isn’t paid separately. Instead, it’s added to your annual taxable income and then charged in the same brackets. What is specific to it, however, are the exemptions and reductions that impact your taxable base.

For example, if you make a profit by selling real estate, its taxability depends on how long you’ve held the property and whether it’s a commercial transaction. Typically, if you’ve owned the property for more than five years, any earnings are exempt from taxation. 

Notably, if the inflation rate has changed by more than 10% during your ownership, you can adjust the price with that in mind, which often reduces the final payable tax.

Corporate Tax

Organizations operating in Turkey are subject to a flat 25% corporate income tax rate. The only exception is companies in the financial sector, which have a rate of 30%. Taxable income is generally calculated based on net income after applying deductions, exemptions, and certain carried-forward losses.

As of 2025, Turkey also applies a minimum domestic corporate tax rate of 10% that helps ensure organizations pay at least 10% on their income before exemptions are applied. Under this system, companies calculate their liability twice, once under the standard regime and once with the 10% standard minimum regime, and pay the higher of the two.

However, several exemptions don’t get included in the 10% base, such as:

• Exemptions from emission premiums
• Exemptions granted under the Law on Technology Development Zone
• Participation exemptions for dividends from Turkish resident entities
• Allowances granted for qualifying design, research, and development activities

Banking and Insurance Tax

Banking and insurance activities are generally exempt from VAT, but they are still subject to the banking and insurance transactions tax. The tax is generally calculated based on income earned from qualifying banking and insurance activities and charged at a 5% rate, although reduced rates of 1% to 0.2% may apply in some scenarios.

Property Tax

Turkey’s property taxes are relatively low, making real estate investment an attractive option for high-net-worth individuals looking to diversify their assets. The tax is an annual fee that’s based on the estimated value of the property, which is determined by the local real estate appraisal commission and published each year. 

The applicable rate also depends on the type and location of the property, doubling in metropolitan areas. Generally, the rates are as follows:

Type of Property	Tax Rate	Metropolitan Tax Rate
Residential property	0.1%	0.2%
Commercial property	0.2%	0.4%
Land	0.3%	0.6%

Aside from the standard property fees, owners whose properties exceed a specific value may also be subject to a luxury tax. This tax is charged at a progressive rate, starting at 0.3% of the estimated property value and rising to 1%, plus a small fixed fee.

When purchasing property, you’re also subject to the title deed transfer tax that’s charged at 4% of its assessed value. Buying newly developed properties directly from the developer or a commercial seller also includes VAT based on the property’s size and location:

1. 1% for housing of up to 150 square meters if it’s part of renovation projects
2. 10% for living spaces up to 150 square meters
3. 20% for commercial properties and living spaces bigger than 150 square meters

Inheritance and Gift Tax

Turkey imposes an inheritance and gift tax on assets transferred without compensation or acquired through inheritance. This tax applies to both Turkish nationals and foreigners who receive taxable assets within the country, including:

• Real estate
• Listed securities
• Unlisted company shares
• Bank accounts or cash 

The base for tax calculation depends on the asset. For example, listed securities are taxed at their stock exchange value at the date of transfer, while bank accounts are based on the balance at the time of death.

Inheritance and gift taxes are calculated on a cumulative, progressive basis, with each bracket taxed at its own rate, applying only to the portion of the taxable base that falls within it. The brackets are:

Taxable Base in TRY	Inheritance Tax Rate	Gift Tax Rate
Up to 3,000,000	1%	10%
3,000,000–7,000,000	3%	15%
7,000,000–15,000,000	5%	20%
15,000,000–30,000,000	7%	25%
More than 55,000,000	10%	30%

This tax doesn’t have to be paid as a single lump sum. Typically, payments are made in six installments over three years, starting on the date the tax is filed. 

Taxation for Foreigners in Turkey

Foreigners living or working in Turkey may be subject to taxation depending on their residency status and source of income. Turkish tax residents are taxed on their worldwide income, regardless of where it was earned. Non-residents are taxed only on work performed in the country or on salaries paid from within the country. However, double taxation agreements may reduce the burden.

As of May 21st, 2026, Turkey has also introduced changes to its tax legislation to make the country more attractive to internationally mobile workers, investors, and professionals. Under the new regime, qualifying individuals are exempt from paying Turkish tax on foreign-source income and gains for up to 20 years.

To qualify for this exemption, you must:

• Not have had a domicile in Turkey during the previous three calendar years
• Not have been a Turkish tax resident during the previous three calendar years
• Become a Turkish tax resident and apply for the exemption certificate within the prescribed deadline

Keep in mind that this only applies to foreign-earned income. Any income you earn in the country is still subject to income tax at progressive rates of 15%–40%.

Another notable update is the change to inheritance and gift taxes. If you qualify for the exemption, the rate remains fixed at 1% rather than the standard 1%–30% brackets.

To benefit from these changes, it’s essential that you understand how to obtain Turkish tax-resident status. 

Bonus: Read our guides on acquiring Turkish citizenship, the country’s CBI program, and expat life in Turkey.

How To Become a Turkish Tax Resident

Individuals can generally become Turkish tax residents in two ways:

1. Staying in Turkey for a set time: Individuals who remain in Turkey continuously for at least 183 days in a calendar year qualify for tax residency. Note that provisional absences, such as leaving the country for vacation, do not interrupt the clock for your stay
2. Having a domicile in Turkey: If your legal residency is in Turkey or you intend to settle in the country, you also qualify for tax residency. In this scenario, you don’t need to meet the minimum stay criterion to qualify for residency

It’s also possible to stay in the country for more than 183 days without becoming a tax resident. This primarily applies to foreign nationals who are in the country temporarily for work, research, education, travel, or rest. In addition, if you remain in Turkey due to circumstances beyond your control, such as illness, detention, or imprisonment, that period will not be taken into account when determining your tax residency.

Foreign capital companies, cooperatives, public economic enterprises, and commercial enterprises can also acquire Turkish tax residency. For this to happen, their registered head office or business office needs to be in the country.

Double Taxation Agreements in Turkey

To prevent foreign investors and international organizations from getting taxed on the same income twice, Turkey has signed double taxation agreements with more than 80 countries. They apply to several types of income, including business profits, personal services, dividends, interest, and royalties. 

Under these agreements, Turkey employs two methods to reduce the burden of double taxation:

1. Credit: Any tax you pay abroad also gets credited against the applicable Turkish tax. However, the credit you get is limited to the amount of that income that’s subject to taxation
2. Exemptions: Taxes paid in other countries, such as real estate income and diplomatic earnings, are completely exempt from Turkish taxation

Keep in mind that the agreement doesn’t apply automatically. To benefit from it, you must declare your intent to the relevant tax office and submit any necessary documentation, such as the Certificate of Residence. If you’re pursuing a tax credit, you’ll also have to prepare and provide documentation that serves as proof of foreign tax payment.

Turkey also has tie-breaker laws that eliminate confusion if you’re considered a tax resident of more than one jurisdiction. These establish a hierarchy of criteria that help determine your primary state of residence for taxation purposes, and include factors like:

• Location of your primary residence
• Center of vital interests
• Nationality

Understanding your tax liability on your own can be complex and confusing. To avoid any unwanted surprises and potential fines, consider working with seasoned professionals, such as experts at Nomad Capitalist.

Navigate Tax Regulations in Turkey Confidently With Nomad Capitalist

Nomad Capitalist is an advisory firm that specializes in helping high-net-worth individuals protect their assets while exploring global mobility. We have helped more than 1,500 clients take advantage of investment and diversification opportunities while optimizing their global tax obligations.

The main ingredient to our success is the Action Plan, a personalized strategy designed to help you meet your lifestyle, relocation, and financial goals. Instead of general advice, our Action Plans focus on individual needs and circumstances, then create a path that helps you achieve your objectives within a desired timeline.

Getting your own Action Plan is a multi-step process that starts with completing a questionnaire to determine whether we’re a good fit. After that, here’s what the process entails:

1. We schedule a one-on-one boarding call to learn more about your goals and needs
2. We use this information to create an Action Plan
3. We present the Plan to you for approval
4. Once approved, we implement the Plan over 12 months while handling administrative work
5. You receive lifetime support regarding any changes, questions, and concerns about the Plan

Whether you’re looking to relocate to Turkey or leverage its beneficial tax regime to diversify your portfolio, having the right support can make a world of difference. To keep the process smooth and stress-free, partner with Nomad Capitalist today!