Turkey is taking another step toward strengthening its position as an international hub for business, investment, and talented specialists. The country’s government is considering a new package of tax incentives that could significantly increase the country’s attractiveness for new residents from all over the world. This is reported by relocate.
The greatest attention has been drawn to the initiative regarding the possible exemption of certain categories of new tax residents from paying taxes on income earned outside of Turkey for a period of up to 20 years.
What Turkey Offers
According to preliminary reports from international media, the preferential regime may apply to individuals who have not been tax residents of Turkey for the past three years.
This concerns specifically foreign-sourced income—dividends, investment income, profits from foreign assets, or work for foreign employers. At the same time, income earned directly in Turkey will continue to be subject to taxation in accordance with local legislation.
It is important to note that the initiative is currently at the review stage and requires final approval by the country’s parliament.
Why This Might Be of Interest to Ukrainians
For many Ukrainians, Turkey has already become one of the most popular destinations for living, working, and doing business due to its geographical proximity, developed infrastructure, comfortable climate, and active Ukrainian community.
If the new tax regime is adopted, the country could become even more attractive for:
entrepreneurs and business owners;
investors;
IT specialists;
consultants and freelancers;
owners of international assets;
professionals who receive income from various countries around the world.
At the same time, experts emphasize: the tax incentive is not an automatic ground for obtaining a residence permit or any other migration status. Legal residence in Turkey requires appropriate grounds in accordance with current legislation.
Tax Residency: What to Pay Attention To
One of the key criteria for determining tax residency in Turkey remains staying in the country for more than 183 days a year.
However, tax authorities may also take into account the so-called “center of vital interests”—the place of residence of the family, business operations, availability of housing, bank accounts, and other economic ties.
That is why the issue of tax residency requires individual analysis and professional consultation, especially for entrepreneurs, investors, and owners of international assets.
Who Can Potentially Benefit from the Incentive
According to preliminary information, individuals who can claim the special regime are those who:
have not been tax residents of Turkey for the past three years;
receive the main part of their income outside the country;
work with international clients or companies;
have investment or dividend income from foreign sources;
plan long-term residence in Turkey.
The final criteria will be determined after the relevant legislation is adopted.
Opportunities and Challenges
Despite the obvious benefits, experts draw attention to a number of important aspects, in particular, the risk of dual tax residency and the need to correctly determine the source of income.
That is why potential participants of the program are advised to carefully monitor the final text of the law and evaluate their tax obligations in other countries in advance.
A New Trend in the Global Competition for Talent and Capital
World practice shows that more and more states are creating special tax regimes to attract investors, entrepreneurs, and highly qualified specialists. Turkey seeks to join this trend, offering competitive conditions for those looking for a new country to live and develop their business.
If the proposed changes are adopted, Turkey could become one of the most interesting destinations for international capital mobility and professionals in the coming years.
Read also: “Companions of Ukraine”: How a New Initiative Can Change the Lives of Thousands of Women
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