Evren Özmen
Serbest Muhasebeci Mali Müşavir
Bilirkişi
evrenozmen@ozmconsultancy.com
www.kooperatiflerkanunu.com

How To Tax İnternational Tech Companies ?

Digital tax: Turkey at the Forefront

What is Turkey’s digital service tax?

Every country wants to start taxation of technology giants such as Facebook, Amazon, Apple, Google. Some of the countries even start to tax such as France, Austria, Turkey, Italy. Of course this is not a new idea for everybody to tax digital companies. Because general opinion is; current tax system does not work for these sort of companies. Because they are international, they are not physically necessarily based in many of the countries where they work which means collecting taxation is not the same is as with the traditional company such as supermarket or construction company. Therefore countries can not tax them properly. 

But Turkey at the forefront because of the taxation ratio (%7,5) and also the president of Turkey is authorized to reduce the tax rate to 1% or increase the rate up to 15%.

When Will Digital Service Tax enter into force ?

The Digital Tax will enter into force in the beginning of March 2020.

Who Gets Taxed ?

Companies with digital revenues over

• TRY 20 million in Turkey 
• EUR 750 million Globally 

What Gets Taxed ?

• Digital Advertising Services
• Digital Platforms for user to user transactions (Airbnb, Uber etc)
• Sale of audio, visual or digital content and services provided through digital media

What is the Tax Ratio and Tax Base ?

The rate of digital service tax is 7.5%. It will be calculated over revenue generated due to above mentioned services.

Why United States is not happy about Digital Tax ? Is this tax discriminates American companies ?

Because majority of the companies which pass the above mentioned limits are American.It is estimated that 30 companies will subject to this tax. Such as Facebook, Amazon, Apple, Google. Only one France company Criteo passes these limits. Unfortunately there is no Turkish company.

According to American government this tax is a discrimination to American Companies. Therefore they threat France to put tariffs to French products such as vine, cheese, hand bags, soap etc.

What about Turkey ?

According to the some of the articles from Us newspapers , US Government plan to start investigation Turkey, Austria and Italy related to the digital tax.

Conclusion 

One study found that big tech companies in France only pay around % 5 of this digital service tax, % 95 of the tax passes to consumers or smaller business. Because they reflect this tax cost to consumers or smaller business owners. 

Contrary to expectations from the digital service tax, it seems that it will not protect domestic technology companies as much as they think and it will only result in more costly services for end users.

12.12.2019

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