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Turkey’s 7.5% Digital Services Tax (DST) continues to reshape the country’s digital economy, targeting foreign and domestic digital service providers exceeding global and local revenue thresholds. Enforced since March 2020, the DST has grown in both scope and scrutiny, especially following the February 2025 U.S. trade retaliation review led by President Trump, which included Turkey’s DST among other contentious levies.
The tax applies to gross revenues from online advertising, digital content sales, platform services, and intermediary facilitation; regardless of a provider’s physical presence in Turkey.
Who Is Liable?
The DST affects all companies, foreign and local, earning over EUR 750 million globally and TRY 20 million locally from digital services. Taxable revenues include:
- Digital advertising: Search engine ads, pop-ups, embedded device ads, and user data monetization.
- Digital content: Streaming, downloads, games, in-app purchases, antivirus software, and e-books.
- Digital platforms: Intermediaries for user interaction, sales platforms, or car listings.
- Transaction intermediaries: Entities facilitating third-party transactions via digital stores.
If a foreign provider has no Turkish presence, the Ministry of Treasury and Finance may require local intermediaries to ensure tax compliance.
Key Rules and Exemptions
- DST is levied at 7.5% on gross revenues; no deductions permitted.
- It cannot be itemized on invoices.
- Monthly declaration and payment is required by the end of the following month.
- DST can be treated as a deductible expense for corporate or income tax but cannot offset other Turkish taxes.
- Companies earning below the thresholds (TRY 20M locally or EUR 750M globally) may claim exemption if supported by a financial audit report submitted by June 30, 2020.
Notably, digital services targeting users outside Turkey are exempt; even if payments are made through Turkish financial systems.
Trade Fallout and Enforcement
The DST has triggered trade friction with the U.S., which sees such unilateral digital taxes as discriminatory. In February 2025, President Trump signed a tariff retaliation review, potentially setting the stage for new duties against Turkish goods if no compromise is reached.
For non-compliance, Turkey’s Ministry may block access to digital services 30 days after a warning notice—an aggressive penalty that could impact major platforms like Meta, Google, and Netflix.
Global Context
Turkey’s DST joins a wave of unilateral digital levies in countries awaiting global consensus on OECD Pillar One reforms. As global negotiations stall, governments continue to enact or enforce national DSTs to capture tax revenues from digital giants operating in local markets.
For digital businesses operating in Turkey, compliance is no longer optional—regardless of where headquarters are based.
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