Turkish President Erdogan on Friday proposed a 20-year tax holiday to lure foreign residents to relocate to Turkey.
Speaking at the Dolmabahce Working Office in Istanbul during the “Türkiye Century Strong Center for Investment Program” event, Erdogan announced an entire series of tax incentives and reforms which are due to be submitted to parliament for voting.
Besides the 20-year tax holiday for foreign residents relocating to the country, the measures include dramatic reductions in corporate tax rates for exporters and manufacturers, and near-total exemptions on transit trade income.
The aim is to boost investment and strengthen Turkey’s position as a global economic hub amidst growing international financial uncertainty.
President Erdogan argued that the changing global economic landscape was elevating Turkey into a “key country” and a major pole in an emerging multipolar world, Hurriyet reports.
Tax incentives for foreign residents to relocate to Turkey
According to the Turkish President, once the measures are implemented, any individuals who had not been tax residents in Turkey for the past three years would be exempt from taxes on foreign income and capital gains for 20 years if they relocate to the country.
Only income earned domestically would be subject to taxation, while inheritance and gift tax for those individuals would be set at a flat rate of 1 percent, says TurkiyeToday.
The measures will also allow Turkish citizens and companies to repatriate assets held abroad, including cash, gold and securities, within a set window and at a reduced tax rate, in a bid to channel overseas wealth back into the domestic economy.
It is understood that the tax incentives for foreign residents could also give a boost to the country’s demographic problem. Last November, Erdogan spoke openly about the demographic crisis that Turkey is faced with due to the steep drop in birth rates compared to past decades. During a speech in Ankara, he said the country’s fertility strategy was multidimensional, including generous financial benefits for each child.
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