Turkey’s governing party has pulled together a draft law, that seeks to impose levies on revenues generated in the country by local and international digital services companies, without specifically naming the US giants, reportedBloomberg.
The draft bill states that developments in technology allow international digital services companies to have commercial operations in a country without a physical presence there, adding that it aims to tax earnings from such services by companies, considering practises in other countries.
Presented to parliament by President Recep Tayyip Erdogan’s Ak Party, the potential law envisages a 7.5 per cent tax on companies that have more than EUR 750 million ($834 million) globally in annual revenues or more than TRL 20 million ($3.5 million) in Turkey from services with audio, visual and voice content, including games, music and videos on mobile devices and personal computers.
If ratified by parliament, companies providing payment services to subscribers using such digital content may also be liable to taxation when the entities offering such services are based outside Turkey.
The draft also gives powers to President Erdogan to double the digital services tax or to reduce it to one per cent on selected services or across-the-board. The finance and treasury ministry will administer the collection of the tax.
According to Statista.com, Turkey has the world’s ninth-biggest number of Facebook users in the world.
Netflix, which has more than 1.5 million users in Turkey, applied in September 2019 for a licence to operate in the country in line with new digital regulations.
Separately, the draft bill also has rulings on foreign currency sales taxation, income tax and accommodation tax.