On 28 June 2022, Turkey published Law No. 7412 (the Istanbul Finance Center Law) in the Official Gazette, which introduces new tax incentives for financial institutions operating in the Istanbul Financial Center (IFC). The main incentive is a 75% reduction in taxable profits for certified financial institutions in the IFC, which is initially increased to 100% during the 2022 to 2031 accounting periods. The 75% (100%) reduction applies for taxable profits derived from "exported financial services", which are defined as financial services provided to non-residents by certified financial institutions, provided that the services are ultimately used abroad. Certain services are specifically excluded:
Further incentives include an exemption from banking and insurance tax and stamp duty on financial transactions and services performed by certified financial institutions, as well as an exemption from financial activity fees for a period of 5 years.
Incentives are also provided for employees of certified financial institutions in the IFC that previously worked abroad. This includes a 60% reduction in taxable employment income where an employee has at least 5 years of professional work experience abroad, increased to 80% if at least 10 years of professional work experience abroad.
Law No. 7412 entered into force on 28 June 2022.