Jan 2025 1% withholding tax on e-commerce intermediaries
The Revenue Administration of Türkiye has published Presidential Decision No. 9284, introducing a 1% withholding tax on payments intermediaries make to service providers operating under Law No. 6563 governing electronic commerce. This measure becomes effective from 1 January 2025.
The regulation specifies two categories of intermediaries subject to withholding obligations:
- Intermediary Service Providers: Entities (natural or legal) facilitating economic or commercial activities by providing an electronic commerce platform.
- Electronic Commerce Intermediary Service Providers: Subset of intermediary service providers enabling contracts or orders for goods or services within electronic marketplaces.
Similarly, the regulation identifies two types of service providers subject to the withholding tax:
- Service Providers: Individuals or entities conducting activities within electronic commerce.
- Electronic Commerce Service Providers: Service providers managing contracts or processing orders for goods or services through electronic marketplaces or their own platforms.
The withheld tax will act as a creditable amount against the annual income tax liabilities of the service providers. Excess amounts not utilized as offsets in the annual income tax returns will be refundable, ensuring the withholding tax functions as a prepayment rather than an additional tax burden.
Withholding VAT is commonly used across South America, particularly on B2C transactions via payment providers. In Europe, it has been adopted to a limited extent in Poland, Italy and Austria. The UK is looking at imposing it after 2025.
Calculate or verify Turkish VAT or other countries indirect taxes including GST calculations on individual or batch transactions with our Advisor and Auditor services.
