The Turkish Parliament has enacted Law No. 7194 which introduces a Digital Services Tax (DST). The DST law was published back at the end of 2019 and will enter into force on 1st March 2020. Following the enactment of the law, the Turkish Government introduced the first and second draft of the General Communiqué on the Implementation of the DST. The final version was released and published 20th March 2020.
The digital services tax rate was set at 7.5%. However, the President of Turkey is authorized to reduce the digital services tax rate to 1% (either separately for each service type or collectively) and to increase the rate up to 15%.Companies that generate revenue less than TRY 20 million in Turkey ( €750 million ) worldwide from digital services in the previous accounting period are exempt from the Digital Services Tax .
The services stated below shall be subject to the digital services tax under the DST law:
- Any type of advertisement services provided through digital media (including advertisement control and performance measurement services, services regarding transmission and management of data related to users, and technical services in concerning the placing of advertisements)
- Services provided through digital media for the sale of auditory, visual, or any other digital content (including computer programs, applications, music, videos, games, in-game applications) and for listening to, watching, playing, recording, or using such content in electronic devices
- Services about provision and management of digital platforms where the users can interact with each other (including services relating to the sale or facilitation of the sale of goods or services among users)
DST registration must be made through the website www.digitalservice.gib.gov.tr, by filling out an electronic form. Upon completion and approval of the form, the DST liability is established in the name of the digital service provider before the Large Taxpayers Administration. A user code, passcode, and a password will be given to the taxpayer to be able to make transactions at the Internet Tax Office. Those that already have “Special VAT Liability for Electronic Service Providers” can use their existing user’s credit. DST payers are obligated to submit their DST declarations by the evening of the last day of the month following the taxation period. (1) (2) (3)
Global VAT Compliance specializes in helping international businesses be VAT compliant around the world offering VAT solutions to companies. If you require detailed information regarding these developments, please contact us here.