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Turkey: Digital services tax, a primer

Turkey: Digital services tax, a primer

A digital services tax was enacted in Turkey in 2019 and was effective 1 March 2020.


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The digital services tax is imposed at a rate of 7.5% on gross revenue realized from certain services provided in Turkey including:

  • Advertisement services provided through digital platforms (including advertisement control and performance measurement services, as well as data transmission and management services concerning users, and technical services for providing advertisements)
  • Sales of auditory, visual or digital contents on digital platforms (including computer programs, applications, music, videos, games, in-game applications, etc.) and services provided on digital platforms for listening, watching, playing of content or downloading the content to electronic devices or using the content by means of electronic devices
  • Services related to the provision and operation of digital platforms so that users can interact with each other (including services relating to the sale or facilitation of the sale of goods or services among users)

Intermediary services of digital service providers on digital platforms are also subject to digital services tax.

Determining the tax base

Digital services tax liability applies with regard to those qualifying entities with a Turkey-sourced revenue exceeding TL 20 million (Turkish lira) and worldwide revenue exceeding €750 million for the fiscal period 2019. The following examples illustrate the tax basis determination.


Company A is not a member of a consolidated group in terms of financial accounting. Company A provides and runs a digital environment where users can interact with each other, as well as advertisement services. Company A generated a revenue of TL 28 million in Turkey, and €740 million worldwide from these digital services. Company A will be exempted from the digital service tax as of 1 March 2020 when the law enters into force because its worldwide revenue for the fiscal period 2019 does not exceed €750 million.

The revenue thresholds (local and worldwide) are taken into consideration on quarterly basis. If these thresholds are exceeded within the year, the exemption ceases and the digital services tax liability starts as of the fourth month following end of related quarter.


The revenue conditions (TL 20 million from Turkey-sourced digital services and €750 million worldwide) for a company are not satisfied for the fiscal year 2019.

Therefore, the company will be exempt from digital services tax as of 1 March 2020. The quarterly revenue of the company in fiscal year 2020 is as follows:


Turkey-sourced revenue

Worldwide revenue

January - March 2020

TL 12 million

€ 280 million

January - June 2020

TL 21 million

€ 756 million

January - September 2020

TL 38 million

€ 900 million

January - December

TL 49 million

€ 980 million

Accordingly, since the amount of the revenue obtained by the company in the January-June period of the 2020 accounting period exceeds both limits, the exemption expires by the end of June in the 2020 accounting period. The liability of the company for digital services tax begins with October in the 2020 accounting period (the fourth tax period following the tax period when the threshold limit is exceeded).

Calculating the tax

The tax base for the digital services tax is gross revenue generated during a fiscal period from services falling within the scope of tax. If the revenue is in foreign currency, that currency must be converted to Turkish lira at the rate applicable on the date the revenue was earned, using the buying rate of exchange of the Turkish Central Bank.

No deductions for expenses, costs, or tax can be made from the tax base. Digital services tax is not indicated separately on invoices or invoice substitutes.

The tax rate is 7.5%, and the digital services tax is calculated by applying the rate to the tax base. The president of Turkey is authorized to reduce the tax rate to 1% or to increase the rate up to two-fold (either separately for each service type or collectively).

Certification of exemption

Digital service providers that provide qualifying services must certify that they are exempt from the tax.

Digital service providers with revenue generated from services falling within the scope of the digital service tax and that exceeds the local threshold (TL 20 million) may claim to be exempt from the digital services tax, but they must certify their status by submitting a report that complies with international auditing standards for independent auditors from at least five different countries, including Turkey, by 30 June following the relevant fiscal period (a calendar year). This report must include certain information such as:

  • Name of the company, contact information (address, phone, e-mail etc.) and partnership information and activities
  • Domain(s) and IP(s) related the digital services rendered
  • Information (title, contact details, etc.) about the authorized contact person (if any)
  • Revenue amounts generated in Turkey for each type of taxable digital services
  • Revenue amounts generated worldwide for each type of taxable digital services
  • An assessment of the digital services tax exemption status of the company

This report and its Turkish translation (translated by a certified translator operating in Turkey) must be uploaded electronically to by digital service providers by 30 June 2020.

If the digital service provider is a member of a consolidated group, the report must also cover the information (title, contact details, revenue amounts generated in Turkey and on a worldwide basis) regarding other group companies.

Digital service tax liability

The person liable for the digital services tax is a digital service provider. A service provider’s status as being fully liable of partially liable for income tax in Turkey through offices or permanent establishments located in Turkey has no effect in terms of the digital services tax liability.

In order to secure payment of the digital services tax, the Ministry of Treasury and Finance has been authorized to hold all parties to taxable transactions (or intermediaries to taxable transactions) responsible for the amount of tax due in the event the taxpayer lacks a domicile, office, registered office or a headquarters in Turkey.

Declaration and payment

The taxation periods for the digital services tax is based on one-month periods of the calendar year. Taxpayers and withholding agents are responsible for submitting digital services tax returns to the “Large Taxpayers” tax office before the end of the month following the tax period. Tax is also to be paid in the same period.

Digital services tax is deductible from the taxpayer’s taxable income with respect to corporate income tax and individual income tax. The amount of digital services tax paid by digital service providers may be taken into account as an expense for income tax purposes (both corporate and individual).

Payment of the tax is to be made to the tax offices or banks authorized for collection, or by debit card or credit card of authorized banks via the internet address of the Turkish Revenue Administration.


Taxpayers (or their representatives in Turkey) that fail to submit returns or to make payments may be served a notice from the “Large Taxpayers” tax office alerting them to their obligations. This notice will be issued based on information obtained through the communication instruments listed on their websites, domain names, IP addresses, and information obtained from similar sources through the notification methods listed under Law No. 213, electronic mail, or any other communication instruments. The notice will also be posted on the Revenue Administration’s website.

If there is no declaration and/or payment within 30 days following the announcement, the Ministry of Treasury and Finance may block access to the services provided by the service providers until the obligations are fulfilled (such information will be sent to the Information and Communication Technologies Authority in order to notify the access providers). Decisions to block would be executed 24 hours after the notification had been served to the access providers.

For more information, contact a KPMG tax professional in Turkey:

Didem Keşmir | +90 (212) 316 6119 |

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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