While global superpowers increase fiscal pressure, Ankara chooses a completely different path. Specifically, the Turkish Parliament has approved a massive tax reform proposed by President Erdogan. Currently, the law only awaits the president’s final signature. The main sensation of this update is a staggering twenty-year tax holiday for foreign investors.
Consequently, new residents will enjoy a zero percent tax rate on foreign income and capital gains. However, an important condition applies to this rule. Eligible individuals must not hold Turkish tax residency for the past three years. Furthermore, investors can now easily legalize cash, gold, and shares through local banks. The rate drops to zero percent if you lock investments in local instruments for five years. Meanwhile, inheritance and gift taxes will plummet to a flat one percent instead of the old progressive thirty percent scale.
Naturally, this aggressive strategy challenges traditional financial hubs. For instance, the corporate tax for manufacturing companies drops to twelve and a half percent. For exporters, the rate will drop to nine or eleven percent. Moreover, the Istanbul Financial Center completely exempts transit trade from any taxation. Therefore, the country actively lures wealthy families amid rising instability in the EU, US, and UK. Turkey is quickly transforming from a simple backup plan into a powerful global business hub.