Turkey: Introduction of Digital Service Tax

New Turkish legislation introduced

In October 2019, the Turkish Government submitted a bill to introduce a Digital Services Tax (DST) into Turkish legislation.

The aim of the introduction of the DST is to ensure that the revenue generated from digital services provided by multinational companies without a fixed place of business/any physical presence in Turkey, is taxed in Turkey.

On 7 December 2019, Law No. 7194 was published and with this came the introduction of the Digital Services Tax.

New rate of DST imposed at a rate of 7.5%

From 1 March 2020, DST will be imposed at a rate of 7.5% of the revenue generated from the services mentioned below:

  • Advertising services provided through digital media (including advertising control and performance measurement services, services such as data transmission and management of users, as well as technical services for the presentation of ads);
  • Services for the provision and operation of digital media where users can interact with each other (including services aimed at the sale or facilitation of sale of goods or services between users);
  • The sale of audio, visual or digital content through digital media (including computer programs, music, videos, games, applications, in-game applications etc) and services provided through digital media for listening, viewing, playing or recording these contents via electronic devices through digital mediums.

The President of Turkey has the authority to reduce the DST rate to 1% separately or to double it and increase the rate up to 15%.

Taxpayers who generated revenues from digital services in the previous fiscal period that are below TRY 20 million and EUR 750 million will be exempt from DST. Those taxpayers that exceed these thresholds will be subject to the DST.

Those taxpayers that are subject to DST will be obliged to submit their DST returns to the relevant tax offices by the end of the month following the taxation period (one month periods).