ARTICLE
6 January 2025

Withholding Tax Rate For Electronic Commerce Activities Is Set At 1%

EA
Esin Attorney Partnership

Contributor

Esin Attorney Partnership, a member firm of Baker & McKenzie International, has long been a leading provider of legal services in the Turkish market. We have a total of nearly 140 staff, including over 90 lawyers, serving some of the largest Turkish and multinational corporations. Our clients benefit from on-the-ground assistance that reflects a deep understanding of the country's legal, regulatory and commercial practices, while also having access to the full-service, international and foreign law advice of the world's leading global law firm. We help our clients capture and optimize opportunities in Turkey's dynamic market, including the key growth areas of mergers and acquisitions, infrastructure development, private equity and real estate. In addition, we are one of the few firms that can offer services in areas such as compliance, tax, employment, and competition law — vital for companies doing business in Turkey.
According to Presidential Decree No. 9284 ("Decree") published in the Official Gazette on 22 December 2024, the withholding tax rate to be applied to e-commerce activities has been set at 1%.
Turkey Tax

New Developments

According to Presidential Decree No. 9284 ("Decree") published in the Official Gazette on 22 December 2024, the withholding tax rate to be applied to e-commerce activities has been set at 1%.

What Does the Decree Mean?

Article 94 of the Income Tax Law and Articles 15 and 30 of the Corporate Income Tax Law were amended by Law No. 7524 on Amendments to Tax Laws, Certain Laws and Decree Law No. 375. According to the amendments, payments made by intermediary service providers and e-commerce intermediary service providers, subject to the provisions of Law No. 6563 on the Regulation of Electronic Commerce ("Electronic Commerce Law"), to service providers and electronic service providers in relation to the activities carried out under the mentioned law are included within the scope of withholding tax. The President was authorized to determine the withholding tax rates for payments subject to this withholding tax.

With the Decree, the President set the withholding tax rate to be applied to e-commerce activities at 1%. Accordingly, intermediary service providers and e-commerce intermediary service providers operating under the Electronic Commerce Law will apply a 1% withholding tax on payments made to service providers and electronic service providers starting from 1 January 2025.

Details regarding the implementation of withholding tax in e-commerce activities are expected to be clarified by a communiqué to be issued by the Turkish Revenue Administration.

Conclusion

Intermediary service providers and e-commerce intermediary service providers operating under the Electronic Commerce Law should closely follow the communiqué to be issued and take the necessary steps diligently and promptly to comply with the withholding tax obligation that will come into effect from 1 January 2025.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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