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Turkey introduce valuable residence, accommodation and digital services taxes

January 23, 2020

On December 7, 2019, a number of tax laws were amended with the Law No. 7194 on Digital Services Tax and Amendment to Certain Laws and Law Decree No. 375. Among other changes, three new taxes were introduced: Valuable house tax, digital services tax, and accommodation tax.

Valuable residence tax

Residential properties in Turkey whose building tax value (bina vergi değeri) or value assessed by the General Directorate of Land Registry and Cadastre (Tapu ve Kadastro Genel Müdürlüğü) is at least TL 5,000,000 (as of January 24, 2020, approximately EUR 763,100) are subject to valuable residence tax. Note that the TL 5,000,000 threshold will be annually increased as of January 1, 2020.

Digital services tax

Revenue generated from the following services provided in Turkey are subject to digital services tax, at the rate of 7.5%: Advertisement services provided on digital platforms; sale of any audio, visual or digital content through digital platforms and digitally provided services to allow listening, watching, playing, recording or the use of such content on electronic devices; and services for the provision and operation of digital platforms allowing user interaction with other users; and digitally provided intermediary services by digital service providers in relation to the aforementioned services.

Some digital service providers and services are exempt from the digital services tax. These exemptions include, without limitation, digital service providers generating revenue less than TL 20,000,000 (as of January 24, 2020, approximately EUR 3,052,400) locally, or EUR 750,000,000 globally, from the taxable services; and revenue generated from payment services under the applicable Turkish legislation.

Accommodation tax

After April 1, 2020, accommodation services in facilities such as hotels, motels, holiday camps, hostels, apart hotels, guesthouses, camping sites and mountain houses, and all other ancillary services such as food and beverage, entertainment services, or the use of pools, gyms, will become subject to accommodation tax. Tax rate will be 1% until December 31, 2020; and from that date forward, the tax rate will be 2%.