Türkiye has put a new asset-repatriation regime into force, but the sweeping exporter tax cuts announced by President Recep Tayyip Erdoğan in April did not survive the legislative process in their original form. Law No. 7582, published on June 4, 2026, allows qualifying financial assets to be brought into the formal economy at tax rates ranging from zero to 5 percent and introduces a 12.5 percent corporate tax rate for eligible production income from 2027. For international investors, the distinction between the political announcement and the enacted rules is critical: Türkiye has created meaningful incentives for manufacturing, regional service centers and foreign capital, but access depends on legal structure, income classification, holding periods and increasingly complex domestic and international tax rules.
The Announcement and What Parliament Ultimately Enacted
At the “Powerhouse for Investments in the Türkiye Century” program on April 24, Erdoğan said corporate tax would fall to 9 percent for manufacturers exporting their own goods and to 14 percent for other exporters. He also announced a new “asset peace,” or varlık barışı, under which money, gold and securities held abroad could be transferred to Türkiye at a low tax cost.
The package was presented as part of a broader effort to make Türkiye a location for production, finance, trade and multinational corporate functions. It also included incentives for transit trade, regional service centers, the Istanbul Financial Center and individuals relocating to Türkiye.
Parliament, however, substantially modified the exporter provision. The initial bill contained the announced 9 and 14 percent rates, but the Plan and Budget Committee replaced that model with a 12.5 percent corporate tax rate on qualifying production income. The final text of Law No. 7582 was approved on May 21 and published in Official Gazette No. 33270 on June 4, according to the Grand National Assembly of Türkiye.
Consequently, the 9 and 14 percent figures should not be used in current investment models. As tax consultancy Narcon noted in its analysis of the enacted law, those rates were abandoned during committee proceedings. From the 2027 tax period, companies holding an industrial registration certificate and actually conducting manufacturing activities, as well as qualifying agricultural producers, will instead pay 12.5 percent on income attributable exclusively to production.
The distinction is material. The new rate supports production regardless of whether the resulting goods are sold domestically or exported. A trading company that purchases and resells goods abroad does not automatically qualify. Non-production earnings within a manufacturing company, such as financial income, rental income or unrelated trading profits, also remain outside the preferential production rate.
Türkiye’s standard corporate tax rate is 25 percent for most companies. Existing legislation generally provides a five-point reduction for qualifying export earnings, producing a 20 percent rate. Manufacturers using the new 12.5 percent production rate cannot stack that benefit with the existing exporter reduction on the same income. This makes accounting segregation, transfer pricing and the definition of production income central to the value of the incentive.
How the New Asset-Peace Mechanism Works
The enacted asset-peace regime covers money, foreign currency, gold, shares, bonds and other capital-market instruments held abroad by real or legal persons. It also covers qualifying assets already in Türkiye but omitted from the statutory books of income-tax or corporate-tax taxpayers.
Assets must be declared through a Turkish bank or intermediary institution by July 31, 2027. Foreign assets generally must then be transferred into an account in Türkiye, or physically brought into the country and documented through customs, within two months of the declaration. The implementing communiqué was published on July 4, according to PwC Türkiye.
The standard upfront tax is 5 percent, but the rate declines when the declarant commits to keeping the assets in specified Turkish instruments. The rate is 4 percent for a one-year commitment, 3 percent for two years, 2 percent for three years and 1 percent for four years. A five-year commitment can reduce the charge to zero. Eligible holdings include term-deposit accounts, domestic government debt instruments, lease certificates and, under the implementing framework, qualifying venture-capital funds.
For companies recording previously unbooked assets, the accounting consequences matter as much as the headline rate. Balance-sheet taxpayers must generally record the amount in a special reserve account. The reserve cannot be withdrawn from the business for two years, except through an addition to capital, although the law provides specific treatment for liquidation and later distributions.
Compliance with the transfer, payment, holding and accounting conditions provides protection from a tax assessment or audit initiated solely because of the declared assets. That protection is not unlimited. It does not neutralize an examination already under way, excuse a failure to meet the statutory conditions or erase banks’ obligations under anti-money-laundering, sanctions and customer due-diligence rules.
Banks will therefore continue to seek evidence of beneficial ownership, source of wealth and transaction history. A declaration under the asset-peace law is not a substitute for documentation acceptable to the Financial Crimes Investigation Board, foreign tax authorities or the compliance department of a correspondent bank.
Capital Repatriation Is Not the Same as New FDI
The regime may strengthen bank deposits, demand for government securities and the formalization of corporate balance sheets. It could also allow Turkish-owned groups to redeploy offshore liquidity into domestic expansion. Yet repatriated resident wealth should not automatically be interpreted as foreign direct investment.
FDI normally reflects a lasting cross-border ownership interest in an operating business. Asset peace may instead bring back portfolio holdings, cash or gold previously held by Turkish residents. Its macroeconomic effect will depend on whether the money finances factories, acquisitions and working capital or remains in deposits and government paper to satisfy the lower-tax holding periods.
This distinction matters because Türkiye is already seeking higher-quality external financing. The Investment and Finance Office reported that the country attracted $13.1 billion of FDI in 2025, 12.2 percent more than in 2024. Manufacturing received $3.02 billion, or 31 percent of the total, while wholesale and retail trade accounted for 32 percent and information and communications for 14 percent. Treasury and Finance Minister Mehmet Şimşek said FDI excluding real estate reached $10.7 billion, its highest level in a decade.
Those figures suggest that production-oriented tax relief could affect investment decisions more directly than asset repatriation alone. A foreign manufacturer establishing a Turkish subsidiary may qualify for the 12.5 percent production rate from 2027 if it obtains the required industrial registration and correctly attributes profit to eligible operations. The project may also qualify for separate investment incentives, but interactions with minimum-tax rules must be modelled before projected savings are included in an investment case.
Export Records Conceal a Competitiveness Problem
Türkiye’s goods exports rose 4.5 percent to a record $273.4 billion in 2025, according to the Türkiye Exporters Assembly. Automotive exports led at $41.5 billion, followed by chemicals at $31.9 billion and electrical and electronics products at $17.7 billion. Imports, however, increased faster, reaching approximately $365.4 billion, and the annual trade deficit widened to $92 billion, according to the Presidency’s Strategy and Budget Directorate.
Exporters have argued that nominal records mask declining price competitiveness. TİM Chairman Mustafa Gültepe has repeatedly emphasized the pressure created by domestic cost inflation, constrained credit and an exchange rate that has not always compensated for rising wages and input costs. TİM’s 2025 assessment called for long-term, low-interest finance and stronger employment support.
That explains why the original promise of a sharply lower exporter tax rate did not fully answer the sector’s immediate concerns. Corporate tax is charged on profit, while businesses facing compressed margins may benefit more from affordable working capital, export-credit availability, energy efficiency and productivity investment. A lower rate has little value to a company that is not generating taxable profit.
The macroeconomic backdrop remains demanding. In its February 2026 Article IV assessment, the International Monetary Fund said annual inflation declined from 49.4 percent in September 2024 to 30.9 percent in December 2025, but remained well above target. The IMF projected 23 percent year-end inflation and 4.2 percent growth for 2026 while warning that Türkiye remained vulnerable to external shocks.
Foreign manufacturers must consequently evaluate the 12.5 percent rate alongside financing costs, wage escalation, currency exposure, imported-input dependence and access to export markets. The European Union’s Carbon Border Adjustment Mechanism adds another layer for carbon-intensive producers in steel, cement, aluminium and related supply chains.
A Broader Attempt to Attract Global Business Functions
Law No. 7582 extends beyond manufacturing and asset repatriation. It creates a qualified service-center regime for multinational groups serving related companies in at least three countries. Eligible centers may deduct 95 percent of qualifying foreign-sourced profits, rising to 100 percent in the Istanbul Financial Center and designated industrial zones. The benefit can apply for up to 20 accounting periods, subject to revenue, activity and remittance conditions.
The law also provides a 95 percent deduction for qualifying transit-trade profits when goods are purchased and sold abroad without entering Türkiye. The rate can reach 100 percent for qualifying operations in designated locations. The Investment and Finance Office said the Istanbul Financial Center’s full deduction for qualifying financial-service export income has been extended through 2047.
These provisions could be more consequential for FDI than the asset peace itself. They target treasury functions, procurement hubs, shared-service centers, regional headquarters and cross-border trading platforms. Still, corporate groups must establish operational substance, document related-party pricing and demonstrate that income falls within the eligible activity.
Large multinational groups must also test the incentives against Türkiye’s implementation of the OECD global minimum-tax framework. Groups with consolidated revenue of at least €750 million can face a 15 percent effective minimum tax. A low Turkish statutory or effective rate may therefore generate a domestic or foreign top-up liability. The commercial value of the incentive may need to be redesigned around refundable support, infrastructure, training or capital expenditure rather than viewed simply as a permanent reduction in group tax.
What This Means for Foreign Investors
Investors should treat the enacted law, not the April announcement, as the basis for decision-making. The immediate task is to classify the proposed operation: manufacturing, export trading, transit trade, a qualified service center or an Istanbul Financial Center activity. Each category has different substance, registration, revenue and profit-allocation requirements.
Market-entry analysis should compare the 12.5 percent production rate with labor, logistics, energy, customs and financing costs. Company incorporation and corporate structuring must then place eligible activities in entities capable of maintaining separate accounts and meeting industrial-registration requirements. Tax and legal compliance should cover transfer pricing, minimum corporate tax, Pillar Two exposure, asset declarations, beneficial ownership and anti-money-laundering evidence.
Investors seeking additional support must map national and regional investment incentives before committing expenditure, since application timing can affect eligibility. Government-relations and regulatory-liaison work is relevant where permits, environmental approvals, industrial-zone status or one-stop-office coordination are required. Import-export facilitation becomes essential for customs classification, origin documentation, inward-processing arrangements and transit-trade models.
Finally, project management must convert the legal structure into an operating factory, service center or trading platform, while expo and trade-fair representation can support the customer acquisition needed to turn tax eligibility into actual export revenue. The reforms improve Türkiye’s proposition, but the gains will accrue mainly to investors that align tax design, regulatory approvals and real operating substance from the beginning.