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.
