Erdogan's 20-year tax break for incoming residents draws money-laundering concern, critics say

Turkish President Recep Tayyip Erdogan unveiled a tax proposal last week that would grant individuals relocating to Turkey a 20-year exemption on foreign-sourced income, minimal tax on domestic income and an inheritance-tax rate of just 1%, drawing money-laundering concerns from analysts who say it lacks effective source-of-funds checks. The plan targets people who have not been tax residents in Turkey for the past three years.

Critics argue the proposal would allow individuals to bring foreign-earned wealth into Turkey 'without meaningful scrutiny of its origin,' in the words of Stockholm-based investigative journalist Abdullah Bozkurt, whose analysis warns the scheme risks functioning as a legal gateway for proceeds of corruption, organised crime and sanctions evasion. Real-estate purchases, already a preferred laundering channel, would be especially exposed; the 1% inheritance rate could allow large illicit holdings to be reclassified as inherited wealth.

The proposal echoes Turkey's 'varlık barışı' (wealth amnesty), enacted eight times under the ruling Justice and Development Party (AKP). The most recent amnesty, in July 2022, prohibited audit or investigation of assets brought into the country. Subsequent prosecutions have shown how it was exploited.

Ayhan Bora Kaplan, a convicted felon arrested in Ankara on 7 September 2023 and previously protected by former interior minister Süleyman Soylu, told investigators he 'earned this money by winning it in foreign casinos at various times' before depositing it during the wealth amnesty.

Çetin Gören and Nejat Daş, central figures in the 2020 'Bataklık' (Swamp) operation against organised crime, used similar provisions to repatriate funds and were acquitted of running a criminal organisation despite INTERPOL notices. In 2026 Spanish authorities seized a vessel carrying about 10 tonnes of cocaine and identified Gören as its owner.

Croatian drug lord Nenad Petrak laundered illicit funds through the amnesty framework and obtained Turkish citizenship through real-estate investment before being arrested in November 2023 under foreign-government pressure.

Finance minister Mehmet Şimşek, who oversees the Financial Crimes Investigation Board (MASAK) and Turkey's banking and financial watchdogs, would carry day-to-day responsibility for enforcing any new safeguards. Critics including Bozkurt say a decade of weakened institutions — particularly following the mass purge of more than 100,000 public officials in 2016-2017 — has eroded the independence of the law-enforcement and judicial bodies that would need to apply them.

Turkey was placed on the Financial Action Task Force grey list in 2021 over anti-money-laundering deficiencies and removed in 2024 on the strength of additional commitments. Bozkurt warns a policy that draws large opaque foreign inflows could complicate Ankara's effort to stay off the list.

Several European jurisdictions — including Italy and Greece — operate special tax regimes to attract wealthy residents, but typically with fixed annual taxes on foreign income, investment commitments and stronger compliance frameworks. The Turkish proposal, by contrast, offers near-total exemption with minimal conditions over an unusually long horizon.