Comprehensive Amendments to Tax and Investment Legislation Now in Effect

Published in the Official Gazette dated 4 June 2026 and numbered 33270, Law No. 7582 on Amendments to Certain Laws (the “Law“) introduces significant changes across a broad range of areas, including tax legislation, investment incentives, technology entrepreneurship, and the regulatory framework governing the Istanbul Finance Center (“IFC“). Overall, the Law is aimed at supporting production and exports, attracting qualified talent and capital to Türkiye, and enhancing the competitiveness of the country’s investment environment on an international scale.

Technology Startups and Convertible Debt Instruments

The Law also enhances employee equity incentives available to technology startups. The income tax exemption applicable to shares granted to employees free of charge or at a discount is increased to twice the employee’s annual gross salary, while the holding period required to benefit from the full exemption is effectively reduced from twelve years to six years.

In addition, non-public companies holding a technology startup designation will no longer be subject to the relevant provisions of the Turkish Commercial Code governing conditional capital increases when implementing such increases based on convertible debt instruments. This framework may facilitate the use of structures comparable to SAFE agreements and convertible notes, which are widely used in early-stage investment transactions.

Broader and Longer-Term Incentives for the Istanbul Finance Center

The Law expands the scope of the employee income tax incentives available under the Istanbul Finance Center regime. Previously available only to financial institutions, these incentives will now apply to all IFC participants. In addition, the 100% corporate tax deduction available to institutions carrying out financial activities within the IFC, which was previously scheduled to expire at the end of 2031, has been extended until 2047. The exemption period for financial activity fees has also been increased from five years to twenty years. Taken together, these changes reflect a policy objective of further enhancing the IFC’s attractiveness not only for traditional financial institutions, but also for fintech companies, technology businesses and international service center structures.

Qualified Service Centers: A New Framework

The Law introduces the concept of a “Qualified Service Center” into Turkish legislation for the first time. While the framework aims to position Türkiye as a regional hub, it is designed for regional service centers that provide management, finance, technology, human resources, data analytics and similar support services to multinational corporate groups from Türkiye.

The regime provides income tax relief for certain employees working at these centers, while also introducing significant corporate tax incentives for a substantial portion of the foreign-source income generated out of Türkiye by such centers for a period of twenty fiscal years. One of the key conditions is that the relevant group must operate in at least three countries and that at least 80% of the center’s annual revenue must derive from related companies abroad. More extensive incentives will be available for Qualified Service Centers operating within the Istanbul Finance Center (IFC) or designated industrial zones.

New Asset Repatriation Regime

The Law introduces a new asset repatriation regime allowing assets held abroad, including cash, foreign currency, gold and securities, to be declared and transferred to Türkiye until 31 July 2027, thereby being brought into the national economy. Depending on the holding period of the assets in certain investment instruments, the applicable tax rate ranges from 0% to 5% under the new regime (compared to between 1% and 3% previously). Subject to the fulfilment of certain conditions, the regime also provides protection against tax audits and tax assessments in relation to the declared assets.

Production and Export Incentives

The Law also expands the corporate tax incentives available for production and export activities. Under the new rules, income derived from production activities carried out by corporations holding an industrial registry certificate and actively engaged in manufacturing will be subject to a reduced corporate tax rate of 12.5% (compared to an effective rate of 24% under the previous regime, which provided a 1-point reduction). In addition, the corporate tax rate applicable to export income will be reduced to 9% for manufacturing exporters and 14% for other exporting corporations (such income was previously subject to a 5-point reduction, resulting in an effective rate of 20%). These amendments will apply as of the 2027 tax year.

Twenty-Year Tax Exemption for Foreign-Source Income

One of the most notable features of the Law is the introduction of a new income tax exemption aimed at attracting qualified talent to Türkiye. Under the new regime, individuals who did not have a domicile or tax residency in Türkiye during the three calendar years preceding their relocation to Türkiye will benefit from an income tax exemption for foreign-source income and gains for a period of twenty years following their relocation. In addition, transfers of assets by inheritance taking place during the exemption period will be subject to inheritance and transfer tax at a rate of 1%.

Other Key Amendments

The Law also increases the corporate tax deduction available for offshore trading income to 95%, and to 100% for entities operating within the Istanbul Finance Center (IFC) and certain designated industrial zones, while allowing these deductions to be taken into account for domestic minimum corporate tax purposes. In addition, “Digital Companies” established by qualifying incubation-stage entrepreneurs in technology development zones will benefit from exemptions from chamber registration and membership fees for three years. The Law also extends the maximum deferral period for public receivables from 36 months to 72 months and increases the threshold for unsecured deferrals from TRY 50,000 to TRY 1,000,000.

General Remarks

Law No. 7582 introduces new incentive mechanisms for technology startups, international investment structures and regional service centers, while significantly expanding the scope of the Istanbul Finance Center (IFC) regime. In particular, the enhancements to employee equity incentives, the introduction of a framework for convertible debt instruments and the new Qualified Service Center regime are developments that merit close attention from startups, investors and international groups considering regional operations in Türkiye.

The practical implications of these changes will become clearer as the relevant secondary legislation and implementation principles are introduced.