Visa holders · From Turkey
The BES law lets you keep your private pension after moving to the US from Turkey. Taxes on an early payout can then reach the same return in both countries.
BES (Bireysel Emeklilik Sistemi) is Turkey’s private pension system. You earn the retirement right after 10 years in the system and at age 56. Ask for a payout before then, and your pension company pays out your savings in full within 20 business days. Turkey withholds tax only on the investment return, never on what you paid in. Without a treaty deferral, the US may tax that return each year you hold the account.
Updated · Sources
Cashing out BES early, 2026
- 15%
- of the investment return is what Turkey withholds when you cash out with under 10 years in BES. After 10 years, it is 10%.
- 20%
- is the state contribution Turkey adds to what you pay in lira in 2026. Turkey ties it to citizenship, so it can continue after you move.
- 60%
- of your state contribution account is yours to keep after 10 years in BES. It is 35% after 6 years and 15% after 3.
The state contribution you have not yet earned goes to Turkey’s budget when you cash out early. Retiring at 56 with 10 years in BES cuts the withholding to 5%.
When does Turkey stop taxing what you earn abroad?
Turkey taxes its residents on worldwide income, and everyone else only on income earned in Turkey.
Your domicile is still in Turkey
Turkey taxes you as a resident while your domicile, the place you live intending to stay for good, is there. A domicile moves only when you settle somewhere new, so a plan to return may keep it in Turkey.
You stay in Turkey over six months in a year
A continuous stay of more than six months in one calendar year also makes you a Turkish resident. Temporary absences from Turkey do not break that stay.
You live abroad on a work or residence permit
Turkey’s Revenue Administration (GİB) treats a citizen abroad over six months on a work or residence permit as a limited taxpayer. Turkey then taxes only your income from Turkey. Staff posted abroad by a Turkish public body, or by an employer based in Turkey, remain full taxpayers, taxed on worldwide income.
You leave partway through a year
Turkey’s Income Tax Law does not appear to tax the unrealized gains on what you own when you go. If you have income to declare that year, your Turkish return is due within the 15 days before you leave.
Keeping a home in Turkey
A home you keep in Turkey can make Turkey your country of residence under Article 4(2), even once the US counts you as resident too.
A 2026 law exempts your foreign income from Turkish tax for 20 years if you later move back. To qualify, you first need three calendar years with no Turkish domicile or tax liability. Tax owed only on Turkish rent, investment income or gains does not break those three years.
Turkey’s gift tax falls on you, the child: TL 294,980 on a TL 5 million gift from a parent.
Turkey taxes a gift of a Turkish citizen’s property, or of property in Turkey. From abroad, you file at a Turkish consulate within one month of the gift. A Turkish bank paying it out can ask for proof the tax is paid, or hold back 15%.
A TL 1 million gift
TL 46,653
That is 5% of the TL 933,065 above the exemption.
A TL 5 million gift
TL 294,980
Turkey charges 5% on the first TL 3 million taxed and 7.5% on the remaining TL 1,933,065.
A TL 10 million gift
TL 669,980
The rate stays 7.5% on the TL 6,933,065 above the first TL 3 million taxed.
US income tax on any of them
$0
Form 3520 reports them once one giver’s gifts, with their family’s, pass $100,000 in a year.
Under Turkey’s 2026 rules, a gift is exempt up to TL 66,935. A gift from a parent, spouse or child is taxed at half the standard gift rates. That gives 5% on the first TL 3 million taxed and 7.5% on the next TL 7 million. Each figure is rounded to the nearest lira. Turkey lets you pay over three years, in two installments a year, in May and November. With no US tax on the gift, the Turkish tax has nothing to offset.
Turkey’s tax on your dividends stops at 20% under the US-Turkey tax treaty, and only Turkey may tax your SGK pension.
Once you hold a green card or pass the day count, the US taxes your income from Turkey, with the treaty exceptions shown below. Turkey can set the treaty aside only for its own residents. A Turkish citizen the treaty places in the US therefore keeps these limits.
| Turkey | US | |
|---|---|---|
| Dividends from a Turkish company or fund | Up to 20% Article 10(2), for an individual; real estate funds only under a 10% stake | Taxed With a credit for Turkey’s tax |
| Interest on a Turkish bank deposit | Up to 15% Article 11(2) | Taxed With a credit up to 15% |
| Gains on shares and funds | Mostly exempt Article 13(5), though a bank may still withhold | Taxed |
| Rent from a home in Turkey | Taxed Generally above TL 58,000 of rent in 2026 | Taxed With a credit for Turkey’s tax |
| A gain on a home in Turkey | Taxed within 5 years of purchase Never on a home you inherited or were given | Taxed Even after 5 years, unless the main-home exclusion covers the gain |
| Your SGK retirement pension | Taxable only in Turkey Article 18(2) | Not taxed Even for US citizens and green card holders |
The US credits Turkish tax only up to each treaty cap, even when Turkey withholds more. Protocol point IX also says tax withheld under Article 94 of Turkey’s Income Tax Law is not an income tax for the treaty’s credit. Read literally, that covers tax withheld from a BES payout and the 20% a business tenant withholds from rent. Whether the US credits either is unsettled.
Which Turkish accounts and jobs are easy to get wrong on a US return?
Treating a Turkish fund as a simple account
Under Turkish law, an investment fund is not a legal entity. US rules still treat a managed fund as a corporation, normally a PFIC. Each one generally needs its own Form 8621 every year. The treaty has no pension-fund rule that would spare funds held inside BES from that form.
Reporting lira interest without the lira’s fall
Report lira deposit interest net of the lira’s yearly fall, not in full. Because the lira likely counts as hyperinflationary, the currency loss generally reduces the interest first.
Working remotely for a Turkish employer
Turkish law counts pay charged to a Turkish employer as Turkish income, even for work done in the US. Article 15 of the treaty leaves that pay to the US alone once you are a US treaty resident, Turkish citizen or not. A Turkish payroll may still want Form 6166, the IRS certificate of US residency, before it stops withholding.
Expecting SGK to cover your US work
Law 3201 lets a Turkish citizen buy SGK credit for documented insurance years abroad, at 45% of a chosen daily earnings figure. That is the only bridge, since the US and Turkey have no totalization agreement. US Social Security and Medicare tax generally applies to work done here, even on a posting from a Turkish employer.
Counting on the two-year teacher exemption
Article 20(2) exempts a Turkish teacher or researcher only on pay from outside the US. Salary from a US university is taxed as usual. A stay over two years loses the exemption for the whole visit, and a green card ends it.
We plan around your BES and handle the US side of everything you keep in Turkey.
For newcomers from Turkey, we prepare each federal and state return, with BES and every other Turkish account on the forms it needs.
- We start with your arrival-year return, often dual-status, and coordinate with your mali müşavir (your Turkish accountant) on the Turkish side.
- Before you request a BES payout, we price it twice: paid before your US residency starting date, and kept and drawn later.
- Each Turkish bank, fund and BES account goes on your FBAR, and on Form 8938 when that form applies. We file Form 8621 for each Turkish fund that is a PFIC, and Form 5471 for a qualifying stake in a Turkish company. The instant quote prices each account, each fund and each company you own over 20% of.
- Gifts from family in Turkey that pass $100,000 in a year go on Form 3520, and we prepare it with your return.
- We credit Turkey’s tax on your rent, dividends and interest on Form 1116, with dividends and interest held to the treaty caps. For tax withheld from a BES payout or by a business tenant, we first check whether US rules allow a credit at all. Your Turkish rent has no US withholding, so we set quarterly estimated payments to cover it.
- We answer any notice the IRS or a state sends about a return we prepared, at no cost beyond your fee.
- Individual return
- from $195
- Business return
- from $495
We quote a flat fee before work starts. We do not bill hourly.
What else should you know before leaving Turkey for the US?
Is there a tax treaty between the USA and Turkey?
Yes: the US-Turkey tax treaty was signed in Washington on March 28, 1996, and entered into force on December 19, 1997. It took effect on January 1, 1998, and still stands as signed. For a US resident, it caps Turkey’s tax at 20% on dividends and 15% on interest. Its saving clause lets each country tax its own residents, and the US its citizens, as if there were no treaty, with listed exceptions. The two countries have no estate tax treaty and no totalization agreement.
Does Turkey tax me after I move to the US?
Turkey taxes only your income from Turkey once it stops treating you as a resident. For a citizen, that usually follows more than six months abroad on a work or residence permit. Turkey then taxes rent from a home there, generally above TL 58,000 a year (2026). It also taxes gains on Turkish property sold within five years of purchase, and withholds tax on Turkish interest and fund income. Your SGK pension stays taxable only in Turkey under the treaty.
What happens to my BES private pension when I move to the US?
You can keep your BES account after moving to the US, and citizens living abroad may pay into it in foreign currency. Cash out early and you keep only the vested part of the state contribution, while Turkey withholds tax on the investment return. The treaty neither defers US tax on BES growth nor lets you deduct contributions, and the IRS has not classified BES. The funds inside are likely PFICs. A BES account goes on Form 8938 as a foreign pension above that form’s thresholds, and very likely on the FBAR too.
Is lira deposit interest taxed in the US?
Yes, once you are a US resident, interest on a lira deposit is part of your worldwide income. The lira likely counts as hyperinflationary under US rules, which apply that label once prices rise at least 100% over 36 months. Turkish consumer prices rose 211% over 2023 to 2025. A yearly currency loss on a lira savings deposit then generally reduces the interest you report.
Sources
- US-Turkey income tax convention (1996), with protocol (IRS text)
- Treasury, technical explanation of the US-Turkey convention (1996)
- US Department of State, Treaties in Force (2025)
- Turkey, Income Tax Law no. 193 (Gelir Vergisi Kanunu), consolidated text
- Turkey, Individual Pension Savings and Investment System Law no. 4632, consolidated text
- Pension Monitoring Center (EGM), state contribution (archived copy)
- Pension Monitoring Center (EGM), what the individual pension system is (archived copy)
- Turkey, Inheritance and Gift Tax Law no. 7338, consolidated text
- Turkey, Civil Code no. 4721, consolidated text
- Turkey, Capital Markets Law no. 6362, consolidated text
- Turkey, Law no. 3201 on counting insurance years abroad, consolidated text
- Revenue Administration (GİB), 2026 guide to investment income
- Revenue Administration (GİB), 2026 guide to rental income for non-residents
- Turkish Central Bank (TCMB), consumer price statistics
- 26 C.F.R. § 1.985-1, Functional currency
- 26 C.F.R. § 1.988-1, Certain definitions and special rules
- 26 C.F.R. § 1.988-2, Recognition and computation of exchange gain or loss
- 26 C.F.R. § 301.7701-3, Classification of certain business entities
- 26 C.F.R. § 301.7701-4, Trusts
- 26 U.S.C. § 1297, Passive foreign investment company
- 26 C.F.R. § 1.1298-1, Section 1298(f) annual reporting for PFIC shareholders (Form 8621)
- 26 C.F.R. § 1.901-2, Income, war profits, or excess profits tax paid or accrued
- 31 C.F.R. § 1010.350, Reports of foreign financial accounts
- IRS, Instructions for Form 8938
- IRS, Instructions for Form 3520 (Rev. December 2025)
- 26 U.S.C. § 102, Gifts and inheritances
- IRS, Form 6166, Certification of U.S. Tax Residency
- 26 U.S.C. § 3121, Definitions (employment for FICA)
- Social Security Administration, POMS GN 01701.005, International Social Security (Totalization) Agreements
- IRS, Publication 901 (Rev. September 2024), U.S. Tax Treaties
Reviewed and updated October 2026. General information, not advice for your situation.