The Turkish government has announced the new and awaited tax amnesty package in today’s Official Gazette, which thus came into force. The package entails strategic provisions that target the repatriation of wealth, taxation of foreign income, incentivising qualified service centres and discounts aimed towards international commercial revenue.

While the amendments address multiple matters, the key changes that would be of most interest to our clients would be;

• Repatriation of Wealth: Companies or individuals are provided the opportunity to repatriate their assets that are currently abroad or to declare their off-the-books assets until 31 July 2027 and benefit from a discounted tax prepayment of 5%. However, further discounts up to 1% are also available subject to providing certain undertakings on the method of saving or investing the repatriated or legalised assets. Subject to the fulfilment of the criteria under the regulation, these repatriated or declared assets would benefit from protection against future tax audits and assessments.

• Discounted Corporate Tax: 95% of the income earned through the transit sale of foreign goods (without importing the goods into Turkiye), including the income of intermediary agents of such transactions, are discounted from the income taxable under corporate tax law. The discount is only applicable if both the seller and buyer of the goods are not resident in Turkiye and applicable to the whole income if such businesses are set up within the Istanbul Financial Centre (IFC) or industrial zones.

• Qualified Service Centres: These service providers are defined under the new package and included under the Direct Foreign Investment Law. Such centres are service providers to companies or groups that operate in minimum three different countries, and provide specified services including financial consultancy, strategic management consultancy, risk management, international accounting, compliance and auditing and legal consultancy. 95% of the income of Qualified Service Centres are discounted from the income taxable under corporate tax law per the above. Further, the qualified workers of such centres can now benefit from an income tax exemption up to three times the gross minimum wage. Further incentives, exemptions and benefits are offered for such businesses if they are set up within the Istanbul Financial Centre (IFC) or industrial zones.

• Exemption on Income Tax for Non-Residents: Individuals who become residents of Turkiye will be exempted from paying income tax on their foreign income for the next 20 years. The exemption is applicable only to income earned outside of Turkey and only for individuals who become Turkish residents and were not residents or taxpayers in Turkiye during the last 3 years.

There is already much discussion about the effects and outcomes of the tax amnesty package. Our tax team would be happy to assist you and your business with any queries you may have or if you would like to benefit from such exemptions.