Türkiye has enacted a broad tax and incentives package aimed at making the country more attractive as a manufacturing, services, transit-trade and regional headquarters base, at a time when Ankara is trying to convert renewed foreign investor interest into higher-value projects and export earnings. The omnibus law, approved by the Grand National Assembly on May 21, 2026 and published in the Official Gazette on June 4 as Law No. 7582, gives foreign investors a more generous menu of tax deductions, service-center incentives, asset repatriation routes and Istanbul Financial Center benefits, but it also raises the importance of careful structuring and compliance.
A Tax Package Built Around Exports and Investment
According to KPMG Türkiye’s July 6 TaxNewsFlash, the new omnibus law amends several tax rules to support investment and exports, including qualified service centers, export-related corporate tax preferences, income tax exemptions for certain foreign-source income, employee share incentives for technology startups, inheritance rules and public receivables provisions.
Paksoy Attorneys at Law, in its June analysis of Law No. 7582 and Presidential Decree No. 11257, described the package as part of a broader effort to “enhance international competitiveness, support growth and improve the trade balance,” while increasing foreign currency inflows and employment. That framing matters. Türkiye is not simply offering isolated tax relief. It is trying to position itself as a platform for regional management, service exports, transit trade, advanced manufacturing and internationally mobile capital.
The law arrives alongside a more explicit national FDI strategy. The Presidency’s Investment Office says Türkiye’s 2024 to 2028 strategy aims to lift the country’s share of global FDI inflows to 1.5 percent and its share of FDI into Central and Eastern Europe, the Middle East and North Africa to 12 percent by 2028. The same strategy identifies climate FDI, digital FDI, global value chain projects, high-end services, knowledge-intensive investment and high-quality job creation as priority profiles.
The challenge is that incentives alone do not remove Türkiye’s macroeconomic risks. Turkish Statistical Institute data cited by Trading Economics showed annual inflation at 32.11 percent in June 2026, only slightly below May’s 32.61 percent. The Central Bank of the Republic of Türkiye kept its policy rate at 37 percent in June, according to its Monetary Policy Committee statement and market summaries, reflecting a still-restrictive environment for financing and working capital. For investors, the new law improves after-tax economics, but it does not eliminate the need to model inflation, currency exposure and funding costs.
What Law No. 7582 Changes for Corporate Investors
The most important provisions for multinational companies are the new or expanded deductions for transit trade, qualified service centers and certain production activities.
Paksoy reports that Law No. 7582 introduces a 95 percent corporate income tax deduction for income from transit trade, meaning the purchase of goods abroad without bringing them into Türkiye, or intermediary activity between non-Turkish buyers and sellers. For Istanbul Financial Center participants and companies operating in certain industrial zones designated based on foreign investment intensity, the deduction rises to 100 percent. This is a significant expansion from the prior framework, under which a 50 percent transit trade deduction was available only to IFC participants.
The law also creates a new qualified service center framework. Capital companies serving related companies active in at least three countries can qualify if at least 80 percent of their annual revenue comes from those affiliates. Qualifying activities include treasury, strategic management, funding, budgeting, reporting, compliance, audit, digital transformation, legal advisory, investment analytics, branding, human resources, procurement, R&D, technical support and coordination services. Paksoy notes that qualifying income may benefit from a 95 percent corporate income tax deduction, or 100 percent for centers operating in the Istanbul Financial Center or designated industrial zones, for 20 accounting periods.
For manufacturing and agricultural production, Law No. 7582 introduces a 12.5 percent corporate income tax rate for income derived exclusively from manufacturing by companies holding an industrial registry certificate and actually engaged in manufacturing, as well as from agricultural production. KPMG separately reported that this rate applies from the 2027 tax period. That provision is narrower than some earlier market discussion of exporter-specific rates, but it remains material for greenfield manufacturing, contract manufacturing and agro-industrial projects.
The Ministry of Industry and Technology also amended special incentive programs on May 8, 2026, according to KPMG. Changes to the Green Transformation incentive rules revise definitions, roadmap requirements, application and evaluation procedures, eligible investment scope, monitoring, final measurement rules and incentive recovery mechanisms if projects fail to meet at least 75 percent of stated targets. Changes to the Technology Move program update definitions, project scoring, committee procedures, production-oriented investment processes and monitoring.
For foreign investors, this means tax planning is now inseparable from operational design. A company cannot simply decide after the fact that it is a qualified service center or a transit-trade platform. It must establish the correct Turkish entity, document income streams, align treasury flows with Turkish filing deadlines, assess industrial zone eligibility and preserve evidence that services are rendered from Türkiye and used abroad. This is where market entry, incorporation, investment incentives, legal and tax compliance, government relations and project management become linked rather than separate workstreams.
Service Exports and the Race for Regional Headquarters
Presidential Decree No. 11257, published on April 30, 2026, is also central to the package. Paksoy says the decree increased the service export income deduction from 80 percent to 100 percent for qualifying services under both corporate income tax and income tax rules, effective for tax periods beginning on or after January 1, 2026.
The eligible service categories include architecture, engineering, design, software, medical reporting, bookkeeping, call centers, data storage, education and healthcare services provided from Türkiye to non-resident customers who benefit from those services abroad. In ordinary corporate income tax terms, Paksoy notes that the deduction may fully eliminate the taxable base on qualifying service export income, although the domestic minimum corporate tax and global minimum tax implications still require separate analysis.
This provision directly targets the service-export model already used by regional hubs in software, gaming, engineering, shared services and business-process outsourcing. It also fits with Türkiye’s human capital proposition. The country offers a large urban workforce, proximity to Europe, the Middle East, North Africa and Central Asia, and a time zone that can support cross-regional operations. For multinational groups reassessing where to place finance, procurement, analytics, HR, software support or design functions, the new rules make Türkiye more competitive on tax cost.
Yet the practical threshold is high. To use these incentives, investors must classify revenue correctly, demonstrate that services are provided from Türkiye, prove that the beneficiary is abroad and ensure that qualifying income is transferred to Türkiye by the relevant tax return deadline. If a group operates through multiple billing entities, cost-sharing arrangements or centralized treasury systems, those mechanics need to be aligned before invoices begin.
That raises the importance of legal and tax compliance, but also of market entry and incorporation decisions. A foreign group may need to choose between a limited liability company, joint stock company, branch, liaison office or IFC participant structure. It may also need government relations support if the project depends on certificates, industrial zone classification or incentive approvals. For service exporters attending Turkish trade fairs or sector events, expo representation can also become part of lead generation and regulatory mapping, especially in software, health services, education technology and engineering.
Istanbul Financial Center and Transit Trade
The Istanbul Financial Center remains a core pillar of Türkiye’s strategy to attract regional treasury, finance and holding functions. Law No. 7582 extends the corporate income tax incentive for financial institutions operating in the IFC, which Paksoy says had provided a 100 percent deduction on financial service export income through 2031, until 2047. It also extends the exemption period for financial activity fees from five years to 20 years.
Bloomberg Tax reported on June 9 that the law introduces a 20-year foreign-source income exemption for qualifying individuals becoming Turkish tax resident, as well as salary exemptions for qualified service center employees, capped at three or five times the gross minimum wage depending on location and status. The employee-side incentives matter because regional headquarters decisions often turn on whether senior managers, treasury specialists and technical staff can relocate on competitive net compensation terms.
The transit-trade provisions are also strategically important. Türkiye has long marketed its geography as a logistics and commercial bridge between Europe, Asia, the Black Sea, the Caucasus and the Middle East. The new 95 percent and 100 percent deductions turn that geography into a more explicit tax proposition for companies that buy and sell goods internationally without moving them through Turkish customs territory.
For import-export businesses, however, the distinction between transit trade, customs-cleared trade, free-zone activity and domestic Turkish sales must be carefully managed. Incorrect classification can undermine the tax benefit and create exposure in corporate tax, VAT, customs and transfer pricing. Investors considering Türkiye as a trading hub need import-export facilitation, tax compliance, customs process design and project management from the outset, particularly where goods, invoices and payments move through different jurisdictions.
The Macro Context: Better FDI Momentum, Persistent Imbalances
The law comes after a stronger year for FDI. The Presidency’s Investment Office reported that Türkiye attracted USD 13.1 billion in FDI in 2025, a 12.2 percent year-on-year increase based on Central Bank balance of payments data. The same Investment Office incentives guide says 432 incentive certificates were issued to international investors in 2025, worth TRY 109.5 billion and expected to create 16,700 jobs.
Those numbers suggest that Türkiye is regaining traction after a volatile period. But the investment case remains mixed. The U.S. State Department’s 2025 Investment Climate Statement said Türkiye’s 2024 FDI capital inflows were USD 6.7 billion, up from USD 5.9 billion in 2023, while also noting that investment incentives promote green investments, technology and regional development. The improvement is real, but Türkiye is still competing against Central Europe, the Gulf, North Africa and Southeast Asia for manufacturing and service hub mandates.
Trade data explain why Ankara is emphasizing exports. Trading Economics reported that Türkiye recorded a USD 10.4 billion trade deficit in June 2026, widening from USD 5.61 billion in May. World Bank WITS data showed that in December 2025 Türkiye exported about USD 26.37 billion of goods and imported about USD 35.67 billion, producing a monthly trade deficit of about USD 9.3 billion. Incentives for service exports, transit trade and manufacturing are therefore also a current-account policy tool.
For investors, this creates both opportunity and policy risk. Projects that help Türkiye earn foreign currency, reduce import dependence, create skilled jobs or support green and digital transformation are more likely to align with government priorities. Projects that rely heavily on imported inputs, domestic consumption or aggressive tax arbitrage may receive closer scrutiny or weaker policy support.
Compliance Will Decide the Real Value of the Incentives
The package is generous, but not automatic. Several incentives depend on precise conditions, including revenue thresholds, activity definitions, certificates, location, income transfer deadlines and employee qualifications. The Green Transformation program’s revised recovery rules, including potential clawback where projects fail to meet at least 75 percent of stated targets, show that Ankara is tightening monitoring as well as expanding support.
There is also a global tax overlay. Paksoy warns that multinational groups within the scope of Pillar Two may not fully retain the benefit of reduced Turkish tax rates if top-up tax is imposed elsewhere under the 15 percent global minimum tax framework. That does not make the incentives irrelevant, but it changes the analysis. Investors need to calculate tax at the Turkish entity level and at the consolidated group level.
The practical implication is that foreign investors should treat Law No. 7582 as a structuring opportunity, not a simple rate cut. A manufacturing investor may need to compare ordinary industrial zone incentives, Technology Move support, Green Transformation incentives and the new 12.5 percent production rate. A software exporter may need to choose between the service export deduction and the qualified service center regime. A trading group may need to decide whether IFC participation, an industrial zone location or an ordinary Turkish company best fits its commercial model.
What This Means for Foreign Investors
Law No. 7582 strengthens Türkiye’s offer to international investors, especially those building export-oriented manufacturing, shared services, treasury functions, software and engineering delivery centers, or transit-trade platforms. It also makes the investment process more technical. The value is no longer only in obtaining an incentive certificate, but in designing the entity, revenue model, location, staffing plan, transfer pricing policy and treasury flows so the incentive survives audit and remains useful at group level.
For a foreign investor, the immediate steps are practical. Market entry analysis should test whether Türkiye is best used as a production base, service-export hub, regional headquarters, trading platform or combination of these. Incorporation and corporate structuring should reflect the chosen incentive route. Investment incentives work should compare national, regional, Green Transformation, Technology Move, IFC and industrial zone options. Legal and tax compliance should document eligibility from the first invoice. Government relations may be needed where certificates, zone status or ministry approvals are decisive. Import-export facilitation and project management become critical where goods, customs, logistics, payments and local execution intersect.
The new law improves Türkiye’s competitiveness, but it rewards investors that plan before they enter. For companies prepared to align commercial substance with the rules, Türkiye’s 2026 incentive package can materially change the economics of regional operations. For those that treat the package as a headline tax break, the risk is that the benefit is lost in the details.