Digital Service Tax


Uçar Law & Consultancy Office

Uçar Law & Consultancy Office

(A) General Information

With the Law no 7194 on Digital Service Tax and the Amendment of Certain Laws and Law Decree No. 375 (“Law”) published on the Official Gazette dated December 7, 2019 and numbered 30971, a new type of tax has been introduced to the taxation system. With this new type of tax, called the Digital Service Tax, the proceeds generated as a result of services offered in digital media and covered by the classification contained in the Law will be levied. Regarding these provisions, which will come into force at the beginning of March 2020, points to take into consideration are as follows;

(B) What Kind of Services Are Subject to Digital Service Tax?

According to the Law, it is accepted as a prerequisite for the taxation that the services causing the birth of tax are shall be carried out in digital media. Digital Media, according to the Paragraph 1 of Article 2 of the Law, refers to “Any environment in which online activity is carried out without physical confrontation”.

According to the Article 1 of the given Law, the services within the following groups of services offered in digital media, in Turkey and the intermediary services related to these services are subject to the digital service tax:

  1. Any and all kinds of advertising services provided through digital media,
  2. Sale of audio, visual or digital content through digital mediums and services provided through digital media aimed at listening, watching, playing or recording these contents via electronic devices through digital mediums or the use of those contents via such devices,
  3. Services of the provision and operation of digital media enabling users to interact with each other.

(C) Who is The Taxpayer and The Tax Responsible for The Digital Service Tax?

According to Article 3 of the Law, taxpayers for the digital service tax are the digital service providers. In accordance with the Law, those who perform the services corresponding to the groups mentioned in Article (B) above are defined as digital service providers. According to the same Article, it would not be relevant whether these digital service providers have full taxpayer status.

Additionally, according to the Paragraph 2 of Article 3 of the Law, in the following cases, the Ministry of Treasury and Finance (“Ministry”) shall hold those who are parties to taxable transactions and those who mediate the processing and payment responsible for the payment of the tax, for the purpose of securing the tax claim:

  1. In cases where the taxpayer does not have any domicile, workplace, legal/registered or business headquarters in Turkey,
  2. In other cases deemed to be necessary.

(D) What is The Tax base and The Rate of The Digital Service Tax


Rate of the digital service tax is 7,5% under the Paragraph 3 of the Article 5 of the given Law. This rate shall be lowered by the President, individually or together by the types of services, up to 1%, or doubled.

Tax Base and the Calculation

Tax base of the digital service tax is the revenue generated from services falling within the scope of the tax in the relevant taxation period. No deductions shall be made from the tax basis under the name of expenses, costs or taxes. Furthermore, the digital service tax will not be shown separately in the invoice and documents superseding invoices.

The digital service tax will be calculated by applying the rate to the base, without any discount.

(E) How is The Tax Declaration Procedure and Payment Process?

The digital service tax will be levied upon the declaration of the taxpayer. The taxpayers and tax responsible parties are obligated to submit their tax returns to the relevant tax offices by the end of the month following the taxation period.

Taxpayers who are obligated to submit tax returns and those held liable for deducting taxes will pay the digital service tax within the tax return submission period.

The tax will be levied by the tax office where the service providers are registered for VAT purposes and the tax office designated by the Ministry of Treasury and Finance for the service providers who are not registered for VAT purposes.

As mentioned above, digital service taxpayers can deduct the paid tax as expenses in the determination of the net profit for the income tax and corporate income tax calculation.

(F) What Are the Tax Exemptions and Exceptions?

With the Article 4 of the Law, two exemption groups have been formed. The groups are as follows:

  1. Those who generated revenues from digital services in Turkey, in the previous fiscal period that are below TRY 20 million,


  1. Those who generated revenues from digital services, globally, in the previous fiscal period that are below EUR 750 million or the Turkish lira equivalent.

In case the taxpayer is a member of a consolidated group in terms of financial accounting, the total revenues of the group as generated from the services falling within the scope of the given tax will be considered in the execution of such limits. The President is authorized to reduce the abovementioned limits to zero or to triple, individually or together, according to the types of services that fall under the subject of the tax.

The proceeds from the following services made in digital media are exempt from the digital service tax and the proceeds generated from these services will not be taken into account in determining the above monetary limits. Except for the services listed below, the exemption and exception provisions contained in other laws shall not apply in terms of digital services tax. The services fall within the scope of exception provisions are as follows;

  1. Services subject to the treasury share payment under the Telegraph and Telephone Law,
  2. Services subject to the special communication tax under the Expenditure Tax Law,
  3. Services delivered within the scope of banking activities under the Article 4 of the Banking Law,
  4. Sales of products created as a result of Research and Development (“R&D”) activities in R&D centers, as defined in the Article 2 of the Law on The Promotion of Research, Development and Design Activities and services provided exclusively through these products.

(G) What Will Happen If No Declaration is Made Regarding the Digital Service Tax And The Tax is Not Paid?

By the tax office authorized to levy the digital service tax, for the purpose of forcing to meet their liabilities, the digital service providers who do not fulfill their obligation to submit a declaration or paying the tax or their legal representatives in Turkey shall be notified by using the information obtained by means of communication tools, domain name, IP address and similar sources on the internet pages, via the notification methods contained in the Tax Procedure Law (e.g. mail), e-mail or all other means of communication. This is announced on the website of the Revenue Administration.

The Ministry shall decide to block access to services provided by digital service providers if they fail to duly comply with the tax declaration and payment requirements within 30 days from receiving a warning from the tax administration.

(H) Conclusion and Enforcement

The Law which published on the Official Gazette dated December 7, 2019 and numbered 30971 and effectuated at that time, will be implemented at the beginning of the third month following the date of publication, namely at March 1, 2020.

Provisions of the Law shall be executed by the President.

With the given Law, it is aimed to gain earnings for the Treasury, by collecting taxes from domestic and foreign digital service providers, that provide extensive services in Turkey and generate high revenues. It can be observed that, as an exemplary, given that the digital service tax rate that came into effect in France on January 1, 2019 was 3%, this rate of 7,5% in Turkey is higher than in the precedent European countries.

Additionally, it is possible to state that, consumer interests will also be negatively affected due to the expectation that the prices of digital services, which are used and recognized extensively in our country, will increase along with the implementation of the digital service tax.

The full text of the Law no 7194 on Digital Service Tax and the Amendment of Certain Laws and Law Decree No. 375 can be accessed here.

You can contact us for further information and to take advantage of our advocacy and consulting services. You can find detailed information about our office’s work on Tax LawBanking and Finance LawInformation Technology LawInternational Trade and Customs Law and Consumer Law on our website.


Uçar Law & Consultancy Office


This article is prepared by Uçar Law & Consultancy Office for information purposes only, and the information and visual materials contained in it cannot be used, reproduced, published, transmitted to a third party or translated without prior written permission from us. This legal memorandum is not a comment or legal opinion and was prepared on the publication date and our attorney’s office is not responsible for its failure to
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