digital service tax has been enacted!

10 August 2020

Digital Service Tax Has Been Enacted!

Digital Service Tax, which has become a main topic especially after January, has been regulated by the Law numbered 7194 on Digital Service Tax and the Amendment of Certain Laws and Decree-Law numbered 375 (“Law”). The procedures and principles regarding the digital service tax have been determined by the notification published in the Official Gazette dated 20 March 2020 and numbered 31074.

The Law regulates the advertising revenue of digital service providers And has introduced a new tax liability for social media platforms and online platforms that broker online product/service sales operating in Turkey. In this post, we have evaluated the digital service tax with its exemptions and types of services.


Who Will Be Subject to the Digital Service Tax?

All kinds of advertisement services carried out over digital media, sale of content, the activities carried out to mediate the sale of product/services, and the brokarage to all these activities are subjected to the tax within the scope of the Law.

Which Contents and Services will be Subject to the Taxation?

All Kinds of Advertising Services Carried Out over digital Media

The scope of the tax is considerably wide in terms of advertising services provided over digital media. Accordingly, the revenues generated from the activities stated below are within the scope of the tax:

  • Ads that provide top ranking in search engine results,

  • Ads used during the viewing of video content,

  • other types of ads, such as pop-up ads.

Generally, companies engage with digital media agencies to benefit from these kinds of advertising services. Digital media agencies that provide services regarding advertising and reporting are also subjected to the digital service tax. Especially sponsored content advertising services will be evaluated within this scope.

Services on Content Sales and Utilization of Contents Made over Digital Media

The income generated from the sale of any audio, visual or digital content (including computer programs, applications, music, video, games, in-game applications, and the like) in the digital environment is subject to the digital service tax. Also, revenues from digital services such as listening, watching, playing, or recording/using digital content are also subject to digital service tax. For example, quite frequently used service providers such as Netflix, Spotify, Google Play Store, App Store, iTunes will be evaluated within this scope.

Provision and Operation of Digital Media that Users Can Interact with Each Other

According to the Law, the income generated by providing and operating digital environments where users can interact with each other is subject to the digital service tax. Services provided for the sale of a product or service among users and services offered to facilitate the sale are also covered by the tax. Service providers such as, Dolap, and Trendyol will be evaluated within this scope.

Agency Services Offered in Digital Media

Revenues from agency services offered over digital media, such as filtering product features or directing them by comparing and sorting based on price, brand, model, etc. are included in the subject of the tax. Service providers such as Skyscanner, Booking, which are used frequently in travel planning, will be evaluated within this scope.

Who are within the Scope of Exemption?

Digital service providers, whose annual revenue accumulated from activities in Turkey is less than TRY 20.000.000 or whose annual revenue accumulated worldwide is less than EUR 750.000.000 have been held exempt from the digital service tax within the scope of the Law.

Turkish Revenue Administration which aims to eliminate confusion regarding who will be liable for the digital service tax within the scope of the regulation guides digital service providers to learn whether they are taxpayers or not with a test on their website.



The Law and the Notification carry out significant amendments regarding the taxation of online services of which the use is constantly increasing and scope is expanding on a daily basis. However, in practice, it is not yet how the collection of taxes from the digital service providers who do not have a representative resident in Turkey will be carried out.

Content: Stj. Av. Alp Akdaş

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