Turkey Seeks To Lure Expat Cash With New Amnesty

by Lorys Charalambous, Tax-News.com, Cyprus

15 October 2008

Turkey hopes the country's diaspora will repatriate deposits to take advantage of some of the highest interest rates in the world, currently at 16.7%, under a scheme which would charge a minimal 1% or 2% tax on the incoming money.

Under the proposed plan, Turkish expats would transfer funds from foreign accounts either electronically or in cash, and would pay a tax of 1-2% for the privilege after completing a registration process. The revenues would be used to bolster the government’s funds as it navigates the financial crisis.

The Turkish government is hoping that the new law will encourage Turkish expatriates to repatriate at least some of the estimated USD100-150 billion in savings they have stashed in their adopted countries. However, similar ideas have failed in the past, and many have questioned why expats would want to send money to help a government to which they might be ideologically opposed.

The draft law assures that "no inspections will be carried out regarding the money brought to Turkey," a move which critics believe could merely attract money launderers, although the government has insisted that measures would be put in place to prevent this.

The plans are to be submitted to the government this week and will give Turkish nationals abroad three months to bring their savings back home. But many question whether the lure of Turkish interest rates will be enough to bring expatriates' cash back to the troubled country.

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