The Turkey citizenship program has become one of the most popular options in recent years, especially for global investors looking to obtain citizenship through investment. However, after obtaining the passport, most investors face the same question: “Will I pay tax on my worldwide income if I become a Turkish citizen?”
The answer to this question is not “automatically yes” as one might think. Turkey implements a residency-based tax system, not a citizenship-based one. This means that your tax obligations are determined more by how much time you spend in Turkey and where your income originates from, rather than your passport.
Tax Logic in the Turkey Citizenship Program: Citizenship ≠ Automatic Worldwide Income Tax
When you obtain Turkish citizenship through investment, you do not automatically pay tax on your worldwide income just because you are a citizen. Taxation is entirely related to whether you are a “full taxpayer” or a “limited taxpayer.”
There are two main tax statuses in Turkey:
- Full taxpayer – Those considered residents in Turkey
- Limited taxpayer – Those not considered residents in Turkey
Citizenship alone does not change this distinction. Therefore, the majority of investors remain as limited taxpayers through conscious planning, keeping their worldwide income outside the scope of taxation in Turkey.
Tax Liability: 183-Day Rule and Residency Criteria
The main criterion determining your tax residency status in Turkey is the number of days you spend in Turkey during the calendar year and your “intention to settle.”
Limited Taxpayer (Non-Resident) – The Preference of Most Investors
If you meet the following conditions, you are generally considered a limited taxpayer:
- Staying in Turkey for less than 183 days in a calendar year
- Not having a permanent settlement purpose in Turkey (being in another country for family, business center, living center, etc.)
As a limited taxpayer:
- Only your income sourced from Turkey (for example, rental income from Turkey, deposit interest, income from a company in Turkey) is taxed.
- Income from abroad such as salaries, dividends, stock gains, and crypto gains is outside the scope of taxation in Turkey.
Therefore, a significant portion of those obtaining citizenship through investment continues to live abroad and remains a limited taxpayer in Turkey.
Full Taxpayer (Resident) – 183+ Days or Place of Domicile
You are generally considered a full taxpayer when one of the following situations occurs:
- Staying in Turkey for more than 183 days in a calendar year
- Acquiring a place of domicile in Turkey; meaning that the center of your life shifts to Turkey
When you are a full taxpayer, as a rule:
- Your worldwide income is subject to taxation in Turkey.
- However, in practice, especially regarding foreign earnings, the transfer of income to Turkey or its use in Turkey is important; some assets held abroad passively may not be taxed.
- Turkey’s double taxation treaties with over 60 countries ensure that you do not pay tax on the same income in two countries (through tax credits or exemptions).
Therefore, investors who frequently come to Turkey, live here, or conduct business must carefully manage their day count and actual residency status.
Investment Options for Citizenship and Tax Implications
The two most commonly preferred routes in the citizenship by investment program are:
- Real estate investment of at least 400,000 USD (with a minimum holding period of 3 years)
- Bank deposit of at least 500,000 USD (with a minimum holding period of 3 years in a blocked account)
Each type of investment has its own unique tax consequences and cash flow effects. Let’s address these in detail below.
Tax Obligations for Citizenship Holders Investing in Real Estate
Taxes at the Time of Purchase: Title Deed Fee, VAT, and Other Expenses
The main taxes you will encounter when purchasing real estate for citizenship in Turkey are:
- Title deed fee (Property Transfer Tax): Calculated at a total rate of 4% (2% for the buyer, 2% for the seller) based on the sale price. In practice, this burden is often entirely passed on to the buyer. Additionally, there may be approximately 3,000 USD in ancillary costs for file, appraisal, translation, etc.
- VAT (Value Added Tax):
- For homes purchased from a company, usually 18%,
- In some small, non-luxury homes outside major cities, a rate of 1% applies.
Foreigners who are not residents and are purchasing property in Turkey for the first time may be eligible for a VAT exemption under certain conditions (for example, if the property is under 150 m², not in the luxury segment, and payment is made through a bank).
Since detailed conditions are frequently updated, it is important to check the latest status through the Presidency of the Republic of Turkey Investment Office.
Annual Property Tax
After purchasing the property, you will pay property tax to the municipality each year. The rates are generally:
- For residential properties, it ranges from 0.1% – 0.2% (depending on whether it is in a major city or not).
Compared to Turkey, these rates are relatively low compared to many EU countries; the long-term holding cost remains limited.
Rental Income Tax
If you rent out the property you invested in, your rental income is subject to income tax. This applies to both full and limited taxpayers, but limited taxpayers only declare rental income sourced from Turkey.
The income tax brackets applied to rental income (example rate set):
- For the first bracket of income, 15%
- As income increases, it rises progressively to 20%, 27%, 35%, and 40%
You can detract certain items from your rental income, such as maintenance, repairs, depreciation, and management expenses. Thus, the effective tax burden is lower than the theoretical rate calculated on gross rent.
Capital Gains Tax (CGT) on Sale
When you sell the property you acquired for citizenship, the gain you realize (the difference between the purchase and sale price) is taxed under certain conditions:
- If you hold the property for less than 5 years and then sell it; the gain is subject to capital gains tax as income tax.
- Sales made after 5 years are generally exempt from capital gains tax under current legislation.
- Gains below the exemption amount set each year (for example, around 87,000 TL for 2024) are excluded from declaration.
- If you are a limited taxpayer and are selling your property in Turkey, you must submit a special declaration within a short period (e.g., 15 days) from the date of sale to declare the gain.
The critical point to note here is that the 3-year holding requirement for citizenship and the 5-year rule for CGT exemption are different things. Selling before 3 years can risk the cancellation of citizenship; selling before 5 years means you will have to pay tax on the gain.
Tax Regime for Those Obtaining Citizenship Through Bank Deposit
It is possible to obtain citizenship by keeping a deposit of at least 500,000 USD (or equivalent currency/TRY) in a Turkish bank for 3 years. In this case, the main tax item is the withholding tax on deposit interest income.
Foreign Currency Accounts (USD, EUR, etc.)
- For maturities up to 6 months or up to 1 year: Approximately 20% withholding tax
- For maturities longer than 1 year: Approximately 18% withholding tax
This tax is generally withheld at source and does not require declaration. Thus, the process is quite simple operationally for the investor.
Turkish Lira Deposits
- For maturities up to 6 months: Approximately 5% withholding tax
- For maturities up to 1 year: Approximately 3% withholding tax
- For maturities longer than 1 year: 0% withholding tax (to encourage long-term TL deposits)
Here, since TL interest rates are generally higher than foreign currency rates, it is necessary to analyze the balance of exchange rate risk vs. tax advantage. Especially for large investments, both interest yield, currency movements, and withholding burden should be evaluated together.
Worldwide Income, Double Taxation Agreements, and Turkey’s Advantages
Although Turkey provides for worldwide income taxation for full taxpayers, there are several important factors that reduce the burden on investors in practice:
- Double taxation agreements (DTA/DTT): Thanks to the agreements Turkey has signed with over 60 countries, you do not have to pay tax twice on the same income in both the source country and Turkey; either Turkey allows offsetting or certain types of income are completely exempted.
- Transfer and use criteria: Some foreign income may not incur tax if it has not been brought to Turkey or used in Turkey. However, this area is sensitive in practical details and requires professional consultation.
In this context, the most critical issue for investors earning income on a global scale is the correct structuring of residency planning, day counting, and which country the income flows are taxed in.
Other Important Tax Titles: Wealth, Inheritance, Social Security
Wealth and Inheritance Tax Perspective
- In Turkey, there is generally no classical wealth tax. This means you do not pay annual net wealth tax on your worldwide assets.
- Limited taxpayer foreigners are generally outside the scope of the Turkish tax system for inheritances and gifts outside Turkey.
This situation can turn the Turkish passport into a strategic planning tool for investors looking to avoid high inheritance/wealth tax regimes, especially in Europe. However, family structure, asset distribution, and other country citizenships should be considered together.
Social Security and Employment Income
- For those actively working in Turkey, social security premium obligations arise. However, since most CBI investors do not work in salaried jobs in Turkey, these obligations are practically limited.
- Foreign pensions are generally not subject to additional taxation in Turkey unless brought to Turkey or certain conditions are met.
Risks, Audits, and Compliance Obligations
Due to global tax transparency standards (OECD, CRS, etc.), many countries, including Turkey, now engage in automatic information exchange. This means:
- Your account movements and income abroad can be more easily accessed by the Turkish tax authority.
- Undocumented money transfers, accounts in countries defined as tax havens, unexplained asset increases, or violations of the 183-day rule increase audit and tax risk.
For CBI investors with high-value assets and income movements; documenting the source of income, tracking the day count, and making complete declarations has now become a necessary risk management step.
Corpenza Perspective: Planning Citizenship, Tax, and Global Mobility Together
Turkish citizenship offers much more than just a strong passport: it opens strategic doors in areas such as corporatization, residency, employment, asset protection, and tax optimization. However, to pass through these doors correctly, the legal and tax dimensions must be structured together.
As Corpenza, we;
- Provide a perspective focused not only on “passport” but also on tax residency and global income structure for those planning to obtain Turkish citizenship through investment.
- Produce solutions in areas such as company establishment, payroll (EOR), posted worker model, tax optimization, and international accounting in Turkey and Europe.
- Assist in restructuring your investment; along with real estate, bank deposits, and possible business/company structures, within the framework of double taxation agreements, day counting plans, and your family structure.
Thus, you can turn Turkish citizenship into an integrated tool for global mobility, asset protection, and tax efficiency rather than just a second passport.
Conclusion: Transforming Tax Obligations in Turkish Citizenship into Strategy
In summary:
- Turkey implements a residency-based tax system rather than a citizenship-based one.
- Most CBI investors pay tax only on Turkey-sourced income while remaining as limited taxpayers; worldwide income is not taxed in Turkey.
- The 183-day rule and your actual residency status in Turkey determine your tax fate.
- In real estate and bank deposit investments; there is a clear tax table regarding title deed, annual holding costs, rental and interest income. It is essential not to take steps without integrating these into the investment decision.
- Double taxation agreements and current tax incentives make Turkish citizenship quite competitive in terms of tax when used correctly.
When handled with the right tax and structuring strategy, Turkish citizenship can be both a strong gateway to Europe and a tool for optimizing tax and mobility on a global scale. The critical factor here is to plan the process in accordance with your individual situation, with professional support.
Important Disclaimer
This text has been prepared for general informational purposes. It does not constitute legal, financial, or tax advice in any way. Tax rates, exemptions, and legislative provisions may change over time; they may apply differently depending on your personal situation.
Before making any investment, citizenship application, corporatization, or tax planning decision, be sure to check the current legislation from official sources (such as the Presidency of the Republic of Turkey Investment Office) and obtain individual professional advice from a qualified tax advisor or legal expert.
