TAX NEWS NO: 2018/15
December 23, 2018
Subject: Advertising services provided through the internet shall be subject to withholding tax.
Presidential Decree no. 476 has been published in the Official Gazette dated December 19th, 2018.
Pursuant to the Presidential Decree, advertising services provided through the internet shall be subject to withholding tax effective from 01.01.2019.
Within this context; withholding tax shall be applicable at the following rates over the payments made (i) to service providers (ii) or to those who act as an intermediary concerning the provision of advertising services through the internet;
15% withholding tax shall apply over the payments made to real persons regardless of their tax residential status (Article 94 of the Income Tax Law)
15% withholding tax shall apply over the payments made to entities not resident in Turkey (Article 30 of the Corporate Income Tax Law)
0% withholding tax shall apply over the payments made to corporate taxpayers resident in Turkey (Article 15 of the Corporate Income Tax Law)
This regulation may lead to discussions centering around the Double Tax Treaties to which Turkey is a party in terms of the applicability of the articles related to business profits and permanent establishment provisions.
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