Turkish Digital Tax Proposal
Ruling party of Turkey, Justice and Development Party has submitted a draft tax legislation to the Parliament introducing a new tax on revenue from digital services. According to draft, revenue from following services provided in Turkey is subject to digital service tax,
- Digital advertisement services,
- Provision of music, video, games and other digital content
- Social media services,
- Any digital intermediary services related the provision of the services above mentioned.
Tax payer of the digital service tax is the resident or non-resident provider of the digital services. Draft legislation also authorized the Ministry of Treasury and Finance to determine the recipient of the services in Turkey and any other intermediary who facilitated the provision of services or payments as being responsible for the payment of the digital tax.
İn case if revenue from digital services in Turkey is less than 20 million Turkish Lira or if revenue from digital services around the world is less than 750 million Euro, providers of the services will be exempted from digital service tax.
Following services are also exempted from digital service tax.
- Services that are subject to Treasury Share payment.
- Services that are subject to Special Communication Tax,
- Services provided under the rule of Banking Law,
- Content that has been developed by R&D Centers in Turkey,
- Services provided under the rule of the Digital Payment and Electronic Money Institution law
Rate of digital service tax is 7,5 %. Base for the tax is the revenue derived in Turkey from those digital services.
Taxable period of the digital service tax is each month. Tax payers or anyone who is responsible from the payment of the tax are obliged to file monthly tax return and make the payment of the tax assessed based on the return with in the following month. Draft legislation is in the agenda of the Planning and Budgeting Commission of the Parliament. It is expected that draft legislation will be enacted by Parliament in a short time.