Investment
2027 Tax Advantages: 12.5% Corporate Tax and a 20-Year Exemption
Law no. 7582 brought two significant advantages: a 12.5-point corporate tax reduction on manufacturing income, and a 20-year income tax exemption on foreign earnings for individuals newly resident in Türkiye.
Law no. 7582 has materially changed the tax picture both for companies manufacturing in Türkiye and for investors newly settling here. The two measures operate independently and address different people: one concerns the corporate taxpayer that manufactures, the other the individual who becomes a Turkish tax resident. Each carries its own conditions, and those conditions are checked at the level of documents — which is why the preparation has to be done before the rules take effect.
Key points
- A 12.5-point corporate tax reduction on income from manufacturing activity, from the 2027 tax period onwards.
- Since the general rate is 25%, a qualifying manufacturer's production income is taxed at 12.5%.
- A 20-year income tax exemption on foreign earnings for individuals newly resident in Türkiye.
- The money does not have to be brought into Türkiye to use the exemption.
- Both advantages depend on applications and documents; neither applies automatically.
The 12.5-point corporate tax reduction on manufacturing
Law no. 7582 amended article 32 of the Corporate Tax Law to introduce a 12.5-point rate reduction for manufacturers. Because the general corporate tax rate is 25%, a qualifying company's income from manufacturing is taxed at 12.5%. The reduction applies to income earned from the 2027 tax period onwards.
- An industrial registry certificate (sanayi sicil belgesi) is required. This is the real gateway; a capacity report on its own is not sufficient.
- The company must actually be manufacturing, and the income must arise from that manufacturing activity.
- The reduction applies only to production income. Income from trading, services and other activities remains at the general rate, so the accounts have to separate them.
- The capacity report sets the ceiling on the volume that can benefit. Sales above the annual production quantity stated in the report fall outside the reduction.
- It cannot be combined with the 5-point export reduction on the same income; for a given profit, one or the other is chosen.
- For companies using contract manufacturers the reduction is not automatic: the work must fall within the company's own production scope, with the organisation and the risk remaining with the company.
In practice: if your machinery includes equipment not listed in the capacity report, or the annual quantity in the report is below your real output, the report needs updating before the start of 2027. Otherwise the reduction will cover only the quantity stated in the report rather than your actual production.
The 20-year income tax exemption on foreign earnings
Article 20/D (repeating), added to the Income Tax Law by article 4 of Law no. 7582, grants individuals who newly settle in Türkiye a twenty-year income tax exemption on the earnings and revenues they derive from abroad. The procedures were set out in Income Tax General Communiqué series no. 333, published on 4 July 2026.
- Only individuals qualify; companies are outside the scope of this exemption.
- The person must have had no residence and no tax liability in Türkiye during the three calendar years preceding the year they became a Turkish tax resident.
- The exemption covers earnings and revenues sourced abroad. Rental income from Turkish real estate, dividends from Turkish-resident companies and self-employment income earned in Türkiye are outside the scope.
- The income does not have to be brought into Türkiye; transferring the money to a Turkish bank account does not by itself create a tax liability.
- The exemption runs for twenty years and applies to those who became Turkish tax residents on or after 1 January 2026.
- The application is made by the end of the year in which residency is acquired; if residency began in the last two months of the year, the deadline extends to the end of February of the following year.
Note carefully: this is not an exemption for capital brought in from abroad. What is exempt is the person's foreign-sourced income, not the capital they transfer — and the exemption does not depend on moving money to Türkiye. Confusing the two leads to the wrong structure and, in some cases, to losing the exemption.
Which measure fits whom?
The two advantages address different people and, very often, two sides of the same investor: the company and the individual. The right structure comes from planning both together.
- For companies building a plant in Türkiye or relocating production here, the first measure is the decisive one; preparation starts with the industrial registry certificate and the capacity report.
- For investors, executives and self-employed professionals moving to Türkiye while their income abroad continues, the second measure is decisive; preparation starts with the residency calendar.
- An investor who sets up a company in Türkiye and also settles here personally can benefit from both at once — but only if the corporate structure and the personal residency decision are planned together.
- Both depend on applications, documents and deadlines. An advantage lost because a condition was not met cannot be recovered retroactively.
Timeline: what has to be done by when
Dates are critical in both measures. The order below shows the sequence the preparation should follow.
- Before the end of 2026: confirm the industrial registry certificate is current, and align the annual production quantity and machinery listed in the capacity report with the real position.
- Before the end of 2026: set up the accounts so that manufacturing income can be tracked separately from other activity income.
- 1 January 2027: the 12.5-point reduction begins to apply to manufacturing income.
- Within the year residency is acquired: file the application for the foreign income exemption. If that deadline passes, the exemption cannot be used for that year.
This page is a general summary of the provisions in Law no. 7582 and Income Tax General Communiqué series no. 333; it does not replace tax advice. Eligibility for both advantages is assessed separately, according to the company's activity structure and the individual's residency history. Legislation and secondary regulation can change, so review your position with us or with your own adviser before deciding.
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