7.5% DST on online advertising, content and platform services
Turkey’s 7.5% DST covers digital service providers exceeding a global revenue threshold of EUR 750 million and local revenue of TRY 20 million. The tax is mainly applicable to revenue generated from online advertising services, digital content sales/services and digital platform services.
It was implemented in March 2020.
On 22 February 2025, President Trump signed a DST tariff retaliation review which included Turkey’s DST.
Scope of the Digital Service Tax
DST is imposed on revenues derived from specific digital services in Turkey, categorized into four main areas:
Digital Advertising Services
Any advertising provided through digital media is subject to DST, including:
- Search engine marketing
- Banner advertisements
- In-video ads and pop-ups
- Online ads embedded in software and electronic devices
- User data-related ad services, performance tracking, and technical support
Even advertisements in online games are included within DST’s scope.
Sale of Digital Content
DST applies to revenues from selling or streaming digital content such as:
- Software, applications, and antivirus programs
- Movies, TV series, music, photos, newspapers, and e-books
- Digital games, in-game purchases, and virtual items
However, certain services are excluded from DST, including:
- Online storage of digital data
- Sale of digital tickets for physical events
- Software downloads necessary for using a purchased product
Online Intermediary Services
DST applies to platforms enabling user interactions, such as:
- Websites facilitating car sales
- Career-related networking websites
If a digital platform only facilitates the sale of goods or services and the seller retains obligations under consumer protection laws, DST does not apply.
Intermediary Services for Digital Transactions
Revenues from intermediary services in digital transactions are also subject to DST. For example, if Company A provides intermediary services on its digital store, and Company B facilitates sales on that store, both companies are liable for DST.
Criteria for Taxation in Turkey
A digital service is considered taxable in Turkey if:
- The service is performed in Turkey
- The service is received in Turkey
- The service targets Turkish users
- The revenue from the service is accounted for in Turkey
Payments recorded in Turkish company accounts, even if made from outside Turkey, also fall under DST. However, advertising services targeting users outside Turkey are exempt.
Tax Base and Rate
- The DST rate is set at 7.5% on gross revenues from digital services.
- No deductions (such as costs or taxes) are allowed when calculating the taxable base.
- DST cannot be separately listed on invoices.
Taxpayers
- DST applies to both domestic and foreign digital service providers.
- Taxpayers include service providers and intermediaries, regardless of whether they are full taxpayers (resident in Turkey) or limited taxpayers (foreign entities with Turkish-source income).
- Foreign companies providing taxable digital services in Turkey must comply with DST regulations.
In cases where a company has no presence in Turkey, the Ministry of Treasury and Finance may require intermediaries processing digital transactions or payments to ensure DST compliance.
Exemptions
A company is exempt from DST if its total revenues in the previous fiscal year are below:
- TRY 20 million in Turkey, or
- EUR 750 million (or equivalent TRY) globally
If a company belongs to a consolidated group, the group’s total revenue from digital services is considered when determining DST liability.
Declaration and Documentation for Exemptions
- Companies exceeding TRY 20 million in Turkey but staying below EUR 750 million globally must declare their exemption.
- A financial audit report from an independent auditor operating in at least five countries (including Turkey) must be submitted by June 30, 2020.
- The report should include company details, digital service domains, revenue data, and exemption analysis.
- Failure to submit the report disqualifies the company from exemption.
Taxation Period, Declaration, and Payment
- DST is declared and paid monthly.
- Taxpayers must submit DST returns by the end of the following month.
- The relevant tax office for submission depends on whether the provider is already registered for VAT.
- DST can be deducted as an expense when calculating corporate or income tax but cannot offset other taxes.
- DST is payable in addition to withholding tax on online advertising, which was introduced in 2019.
Penalties for Non-Compliance
- If a taxpayer fails to declare and pay DST within 30 days of a warning, the Ministry of Treasury and Finance can block access to digital services.
- This penalty applies to both foreign and local digital service providers.
