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A Summary Of The New Legislation Regarding Digital Services Tax


The constant increase in Internet use and technological improvements have helped us access many applications and programs on digital platforms. Companies working with such digital business models have made significant profit from the services they provide through such digital platforms. Often, the service providers are not residents of the countries they profit from.

Considering the fact that countries have the essential right to collect taxes from profits made within their own borders, a digital services tax has been under heated discussion in the global arena.

New Legislation in Turkey

The Law Numbered 7193 on Digital Services Tax and Amendment to the Legislative Decree Numbered 375 and Other Laws for implementing digital services tax (the "New Law") has been published in the Official Gazette of the Republic of Turkey dated 7 December 2019 and numbered 30971. The New Law aims to implement a structure by which businesses that provide services in digital platforms will pay tax pro rata the profit they make from their users in Turkey and sets forth the scope and the rate of the Digital Services Tax ("DST") as well as the exemptions from paying such tax.

i) Services Subject to the DST and Taxpayers

Pursuant to the New Law, certain services will be subjected to DST. Such services include digital advertising, sale of any audio, visual or digital content through digital platforms and services provided in digital media for listening, recording, playing, viewing or using any of these contents. Any services that provide for or operate in a way in which users can interact with each other, such as social media platforms and digital intermediary services relating to the above services will also be subject to DST.

Accordingly, the providers of the above services will be taxpayers in accordance with the New Law. The liability for paying the DST will survive even if such service providers are fully liable under Income Tax Law numbered 193 and the Corporation Tax Law numbered 5520 or perform the said activities under limited liability through business places registered in Turkey or permanent representatives.

ii) Tax Rate and Relevant Principles

The DST rate is 7.5% however the President is authorised to double or decrease the rate to 1%, separately or altogether, in accordance with the types of the services provided. The DST is derived from the revenue gained from the supply of the above services and is to be paid monthly (which can be stretched to once in three months depending on the service provided).

iii) Exemptions

Taxpayers not exceeding a revenue threshold of: (i) EUR 750 million in global revenues (or Turkish Liras equivalent); or (ii) TRY 20 million in local revenues through the digital services they have provided within the period prior to the related taxation period, are exempt from the duty to pay the DST. This revenue threshold appears to be a relief for start-ups, in particular.

In addition to the above, services subject to "treasury duty" payment under Telegram and Telephone Law, "special communication tax" under the Expenditure Taxes Law, services provided within the framework of the Banking Law Numbered 5411, payment services provided under Article 12 of the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions and services developed in research and development centres are also exempt from the DST.


The provisions of the New Law regarding DST will be effective as of the beginning of March 2020. It is of great importance for digital service providers to assess their DST payment liabilities under the New Law and the procedures to be implemented accordingly.

Article by Murat SoyluEge GöktunaBerfu Öztoprak and Beyza Ölçer

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