In case the terrestrial, satellite or cable broadcastings are simultaneously transmitted on digital platforms, the revenues generated from the advertisements that are not included in the content of the original broadcasting stream shall also be considered within the scope of digital service tax.

b) Services Regarding The Sale of Content and the Use of such Content Through Digital Platforms

The Communiqué specifies the scope of these services and states that the revenue generated from the sale of “programs, software and applications used in electronic devices”, “image, audio and text file contents such as movie, series, video, picture, photograph, graphic, article, magazine and newspaper”, “all kind of digital games and extra game packs” (and other similar contents) through digital platforms and also the services aiming at the use of these contents (such as listening, watching, playing and recording via electronic devices or using these contents on such devices).

c) Providing and Operating Digital Platforms, through which the Users May Interact with Each Other

 The Communiqué sets forth that the revenue generated from the following services shall be considered within the scope of digital service tax:

1. Providing and operating all kinds of digital platforms through which the users may share content, comment on the contents shared or interact with each other,
2. Services provided on digital platforms regarding the sale and purchase of goods and services; intermediation by undertaking functions such as guaranteeing the payment, delivery or return, or intermediating these or facilitating the sale and purchase of the good or service without undertaking any function or announcement of the good or service subject to sale through the digital platform or providing access to such announcement.

However, it must be noted that the revenue generated by persons selling the goods or performing the services is not subject to digital service tax.

d) Intermediary Services Performed for the Services Provided through Digital Platform

 As per Law No. 7194, revenue generated from intermediary services in connection with the services provided through digital platforms is within the scope of the digital service tax. The Communiqué provides the examples of store within a store or providing guidance to the user through filtering and sorting by considering the features of the product.

2. TAXPAYERS

As stated under the Law No. 7194, the taxpayers of the digital service tax are the digital service providers. It has no impact on the liability for digital tax whether the taxpayer is a fully liable one or a limited taxpayer or whether the taxpayer carries out the activities through a workplace or a permanent representative in Turkey or not.

As  per  the  Communiqué,  the  service   providers   must   fill   out   the   form   by   visiting   www digitalservice gib.gov.tr before submitting their first digital service tax declaration. Upon approval of the completed form, the “Digital Service Tax Liability”shall be designated in the name of the digital service provider. Afterwards, a user code, password and code will be provided to the taxpayer for the operations to be held through Internet Tax Office, however, the ones holding
 “Special VAT Liability for Electronic Service Providers”may use their already existing user codes, passwords and codes.

3. EXEMPTIONS AND EXCEPTIONS

Within the 2019 fiscal period, those who generated more than TRY 20 million revenues in Turkey and also more than EUR 750 million or its foreign currency equivalent worldwide from digital services indicated in Article 1 of the Law No. 7194 (the services specified under the title “the scope of digital service tax”) are considered as digital service taxpayers as of March 1, 2020. Thus, the service providers generating revenue less than one of the abovementioned amounts are exempt from this tax. It must be noted that the revenue generated in Turkey shall be included in the worldwide revenue. The President is authorized to decrease these amounts to zero, either individually or collectively, or to make a threefold increase.

In case the revenue generated from the relevant services is less than the abovementioned amounts consecutively for two accounting periods, the exemption from the tax shall commence as of the following accounting period.

In case both of these amounts are exceeded within the relevant accounting period, as per Article 4/2 of the Law No. 7194, the exemption shall cease to exist and the digital service tax shall be applied from the fourth taxation period following the period within which the aforementioned amounts are exceeded.

For the digital service providers residing in Turkey who have not registered themselves as a  digital taxpayer although their revenue generated exceeds TRY 20 million, the Revenue Administration or the Directorate of Large Taxpayers’ Office may request in writing from these providers to certify that they are exempt from the tax. In this case, the necessary information and documents must be submitted within 30 days beginning from the date that the request is notified.

The Communiqué refers to Article 4 of the Law No. 7194 for the scope of the exceptions; however it also provides details on certain matters. For example, the following services offered by the banks or other financial institutions on digital platform within the framework of Article 4 of the Banking Law which is regulated as an exception under the Communiqué are exempt from the tax:

1. intermediation of the trading of future contracts, option contracts or simple or complex financial instruments involving multiple instruments,
2. intermediation for the sale of capital market instruments through issuance or public offering,
3. transactions for trading previously issued capital market instruments for intermediation purposes,
4. insurance agency and individual private pension fund services.

4. TAX BASE, RATE AND CALCULATION

The Communiqué states that all revenues regardless of their name are included in the tax base, and within this scope sale, transaction or service fee, commission fee, subscription fee, membership fee, intermediation fee and monies received or borrowed under similar names, monetary benefit, service and values provided in the form of goods and other manners are therefore included in the revenue, meaning included in the tax base that shall arise.

The tax rate is set at 7.5% and the President is authorized to reduce this rate to 1%, either individually or collectively by taking into account the service types, or to double it. The calculation will be made by applying the tax rate to the base.