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Law No. 7582 is a regulation that, under certain conditions, grants foreign individuals newly resident in Türkiye and qualifying investors an income tax exemption of up to 20 years on foreign-sourced income, while introducing a related foreign asset declaration obligation.
This guide explains who the exemption covers, which types of income fall within its scope, how the 20-year period operates, and the procedure and timing of the asset declaration — with a particular focus on foreign property investors and new residents.
The core requirement for benefiting from the exemption is the timely and complete fulfilment of the related obligations; for this reason, the implementation timeline matters as much as the substance of the regulation.
What Is Law No. 7582 and Which Need Does It Address?
Law No. 7582 is described as an omnibus law regulating the tax status of foreign investors and new residents in Türkiye. Its principal aim is to attract foreign capital and qualified individuals to the country, while ensuring that these persons' assets held abroad are brought on record.
Residency is the cornerstone of the Turkish tax system. Under the Income Tax Law, individuals who continuously reside in Türkiye for more than six months within a calendar year are treated as full taxpayers and, as a rule, are taxed in Türkiye on both their domestic and foreign-sourced income. Law No. 7582 introduces a time-limited exemption to this general rule in favour of new residents, shifting the balance toward the investor.
Income Tax Law, Arts. 3-4 (Residency and full tax liability principle)Individuals deemed resident in Türkiye are taxed on the entirety of their earnings and revenues obtained both within and outside Türkiye. The exemption introduced by Law No. 7582 has been added to this principle as a time-limited and conditional relief.
The 20-Year Income Tax Exemption: Scope and Conditions
The essence of the exemption is as follows: foreign individuals who newly settle in Türkiye and meet the conditions sought by the regulation may be exempt from income tax on certain foreign-sourced income for a period of up to twenty years from the acquisition of residency. The exemption is not automatic; it is subject to application and declaration requirements.
Who Can Benefit from the Exemption?
The exemption is essentially aimed at foreign individuals who become resident in Türkiye for the first time. By the logic of the regulation, the ability of persons previously taxed as full taxpayers in Türkiye to benefit from this right is restricted. In regions such as Antalya that attract intense foreign investment, individuals who enter the residence or citizenship process by purchasing real estate form the typical target group for this exemption.
A person wishing to benefit from the exemption must formally acquire residency status and complete the application and declaration steps envisaged by the regulation. The exemption is therefore not a right that arises automatically upon actual settlement, but one that depends on procedure.
Income Within and Outside the Scope of the Exemption
The boundary of the exemption is determined by the source of the income. As a general rule, foreign-sourced income is assessed within the scope of the exemption, while domestic-sourced income obtained in Türkiye continues to be taxed under general provisions. This distinction is the most critical point for the investor's tax planning.
Potentially within the exemption: Profits of companies abroad, foreign dividend and interest income, and rental income from real estate located abroad and similar foreign-sourced earnings.
Outside the scope of the exemption: Rental or sale gains from real estate located in Türkiye, commercial activity income carried out in Türkiye, and other domestic-sourced income.
How the 20-Year Period Operates
The twenty-year period expresses the maximum ceiling of the exemption; the full period is not guaranteed in every case. The period begins to run from the date residency status is acquired and depends on the uninterrupted preservation of the exemption conditions. If the conditions are lost, the exemption may end for the remaining period.
Foreign Asset Declaration: Obligation and Procedure
The other side of the exemption is the transparency obligation. The regulation imposes on persons who benefit from, or wish to benefit from, the exemption the duty to declare their assets held abroad. The declaration both ensures the auditability of the exemption and serves to bring assets on record.
Who Is Obliged to Declare?
The declaration obligation is essentially directed at new resident foreign individuals who benefit from the exemption. The scope of the obligation and its connection to the exemption are detailed in secondary legislation (communiqués and regulations). For this reason, those subject to the obligation must follow the implementing regulations as closely as the text of the law itself.
Assets to Be Declared
The foreign asset declaration is typically designed to cover the person's real estate abroad, bank accounts, securities, company shares and similar economic values. The purpose of the declaration is not the taxation of the asset but making it visible through disclosure; however, an incomplete or incorrect declaration may put the exemption right at risk.
Declaration Period and Procedure
Making the declaration within the time limit is decisive for preserving the exemption. Missing the deadlines may lead not only to administrative sanctions but also to the loss of the right to benefit from the exemption. Procedural details such as the authority to which the declaration is submitted and the form to be used are determined by the implementing legislation.
Tax Procedure Law, declaration and notification dutiesFailure to fulfil notification duties prescribed in tax legislation within the time limit may be associated with irregularity and special irregularity penalties. This framework also applies to the asset declaration under Law No. 7582.
Relationship with Double Taxation Treaties
The double taxation avoidance treaties Türkiye has signed with numerous countries determine in which country a given income of the foreign investor will be taxed. The exemption under Law No. 7582 must be assessed together with these treaties, because an income may be within the scope of the exemption in Türkiye yet still have been taxed in the source country.
For this reason, the investor must examine their tax position holistically — not solely through Turkish legislation, but within the framework of the rules of the other countries where they are resident or earn income, and the bilateral treaties.
Practical Consequences for the Property Investor
For a foreign investor purchasing real estate in Türkiye, Law No. 7582 presents a two-sided picture. On one hand, a significant tax advantage arises on foreign-sourced income; on the other, rental and capital gains from real estate located in Türkiye remain subject to general provisions.
| Subject | General Position Before the Exemption | After Law No. 7582 |
|---|---|---|
| Foreign-sourced income | Taxed in Türkiye as a full taxpayer | Exemption of up to 20 years if conditions are met |
| Rental income in Türkiye | Subject to income tax | Continues to be taxed under general provisions |
| Capital gain on property in Türkiye | Subject to capital gains rules | Outside the exemption; general provisions apply |
| Assets held abroad | General declaration rules | Foreign asset declaration tied to the exemption required |
| Continuity of the right | — | Depends on preserving conditions and declarations |
This table shows that the exemption is not a "full immunity"; it provides only a conditional and time-limited advantage directed at foreign-sourced income. Foreign investors acquiring residential or commercial property in Antalya would be well advised to base their investment decision not solely on the exemption, but also taking into account the tax consequences of income arising in Türkiye.
Risks and Obligations to Keep in Mind
The most fragile point of benefiting from the exemption is the continuity of obligations. An incomplete or late foreign asset declaration, the loss of residency conditions, or an incorrect assessment of the source of income may cause the exemption to be questioned with retroactive effect.
Moreover, the exemption is an area that varies greatly according to individual circumstances; the same regulation may produce very different results for two different investors. For this reason, a detailed assessment of the income structure, residency history and foreign assets before application is important to prevent disputes that may arise later.
