We have previously shared with you the news of the future of“Digital Service Tax”to the international tech giants. The proposal for the law on digital service tax was adopted by the General Assembly of the Turkish Parliament. Under the law, any advertising services offered by digital service providers will be subject to Digital Service Tax.
Digital sale of any audio, visual or digital content, as well as digital lye, to be listened to, monitored, played, recorded or used on electronic devices The proceeds from the provision and operation of digital media, where users can interact with each other through services, will also be covered by the Digital Service Tax. Digital intermediation services for these services will also be subject to the same tax.
The taxpayer and those responsible for digital service tax with the offer that defines the concepts of “digital media,” “digital service providers,” “revenue-making,” “service delivery in Turkey,” “consolidated group in terms of financial accounting” Determining.
Digital Service Tax will be the payer of digital service providers. Whether or not they are fully compliant in terms of income tax law and corporate tax law, whether they carry out these activities through their workplace or permanent representatives in Turkey will not affect the Digital Service Tax obligation. In the absence of the taxpayer’s residence, business, legal and business centers within Turkey, the Ministry of Treasury and Finance shall be able to hold those who are party to taxable transactions and those who mediate the transaction and payment responsible for the payment of taxes in order to secure the tax receivable stipulated in other cases.
The law also determines those exempt from digital service tax and services exempted from this tax. Accordingly, in the accounting period before the corresponding accounting period, those with revenues from Turkey for services subject to Digital Service Tax will be exempt from the Digital Service Tax, with 20 million Turkish liras or 750million euros in worldwide revenues or less than turkish lira for equivalent foreign currency. If the taxpayer is a member of a consolidated group in terms of financial accounting, the total revenue of the group regarding the services that are subject to the tax will be taken into account in the implementation of these provisions.
If both of these limits are exceeded within the relevant accounting period, the exemption will end and digital service tax taxation will begin starting from the fourth taxation period following the taxation period in which the limit has been exceeded. The determination of whether these limits have been exceeded will take into account the cumulative proceeds obtained during the accounting period at the end of the quarterly periods of the accounting period. Tax exemption for those who fall below any of the exemption limits for two consecutive accounting periods will start again from the following accounting period.
The president will be authorized to reduce or triple these levels to zero, ee separately or together, depending on the types of services that come into the tax. The Treasury and Finance Ministry will be authorised to impose notification and certification obligations for the determination and implementation of the exemption and to determine the procedures and principles for the implementation of the regulation. In this context, those who fail to meet their notification and certification obligations in full and timely manner will be given an additional 30 days to meet their obligations. Within the given additional period, those who do not fulfill their notification and certification obligations correctly in full and on time will not benefit from the exemption.
The services paid the Treasury share through the telegraph and telephone law’s nationally publicmobile electronic communication services, some services under the Banking Law, the Law on Supporting Research, Development and Design Activities, the sale of products created as a result of R&D activities in R&D centers and the proceeds from the services offered exclusively through these products will be exempt from the Digital Service Tax and the proceeds from these services will be exempt from the Digital Service Tax. will not be taken into account in determining the exemption requirements. Exemptions and exemptions for the Digital Service Tax shall be made only by adding provisions to this law or amending this law. Exemption or exemption provisions contained in other laws will be void in respect of this tax.
The basis of the Digital Service Tax will be the proceeds from the services that come under the tax during the relevant taxation period. If the revenue is calculated in foreign currency, the currency will be converted into Turkish currency at the exchange rate of the Central Bank of the Republic of Turkey, which is valid at the time of receipt of the proceeds. There will be no reduction in the name of expense, cost and tax from the tax base. Digital Service Tax will not be shown separately in documents that replace invoices and invoices. The Digital Service Tax rate will be 7.5 per cent. Digital Service Tax will be calculated by applying the base rate and there will be no reduction in the tax calculated in this way. The president will be authorized to reduce this rate by up to 1 per cent, either individually or together, in terms of types of services.
The taxation period in the Digital Service Tax will be one month of the calendar year, but the Ministry of Treasury and Finance is authorized to determine a quarterly taxation period, rather than a quarter of taxation, depending on the types of services and the operating volumes of the taxpayers.