From 1 January 2025, payments made by intermediary service providers and e-commerce intermediary service providers to service providers are subject to withholding at 1%.
Under the amendments made by Law No. 7524 of 28 July 2024 to Article 94 of the Income Tax Law and Articles 15 and 30 of the Corporate Income Tax Law, payments made by intermediary service providers and electronic commerce intermediary service providers to service providers and electronic commerce service providers in connection with their activities under Law No. 6563 on the Regulation of Electronic Commerce were brought within the scope of personal and corporate income tax withholding.
Under this Decree, the tax withholding rate in electronic commerce has been set at 1% with effect from 1 January 2025.
Revenue Administration announcement
The Revenue Administration’s announcement on the subject contains the following explanations:
“Within the scope of the application:
- natural and legal persons engaged in electronic commerce activity (service providers),
- intermediary service providers enabling contracts to be concluded or orders to be placed for the supply of goods or services of electronic commerce service providers in an electronic commerce marketplace,
will be subject to withholding at 1% from 1 January 2025 on payments made in respect of activities falling within Law No. 6563 on the Regulation of Electronic Commerce.
The obligation to withhold has been imposed on:
- intermediary service providers (natural and legal persons providing the electronic commerce environment for the economic and commercial activities of others),
- electronic commerce intermediary service providers.
Those subject to the withholding obligation will withhold from the payments they intermediate and pay the amounts to the tax office.
Personal and corporate income taxpayers will offset the taxes withheld in the quarterly advance tax returns and in the annual return.
In the annual return, both the taxes withheld in the last three-month period of the year and amounts that could not be offset in the advance tax returns will be offset, and any amounts overpaid will be refunded.”
Amendments made:
The amendments made by this Decree to Decrees No. 2009/14592, 2009/14593 and 2009/14594 are set out below.
Decree No. 2009/14592
The following subparagraph has been added to the first paragraph of Article 1 of the Decree annexed to Decree No. 2009/14592 on the withholding rates in Article 94 of Income Tax Law No. 193:
“18. 1% on payments made by intermediary service providers and electronic commerce intermediary service providers, under Law No. 6563 of 23 October 2014 on the Regulation of Electronic Commerce, to service providers and electronic commerce service providers in connection with their activities under that Law.”
Decree No. 2009/14593
The following subparagraph has been added to the first paragraph of Article 1 of the Decree annexed to Decree No. 2009/14593 on the withholding rates applicable to the income and revenues of non-resident entities subject to withholding under Article 30 of Corporate Income Tax Law No. 5520:
“16- 1% on payments made by intermediary service providers and electronic commerce intermediary service providers, under Law No. 6563 of 23 October 2014 on the Regulation of Electronic Commerce, to service providers and electronic commerce service providers having a workplace or permanent representative in Türkiye, in connection with their activities under that Law.”
Decree No. 2009/14594
The following subparagraph has been added to the first paragraph of Article 1 of the Decree annexed to Decree No. 2009/14594 of 12 January 2009 on the withholding rates in Article 15 of Corporate Income Tax Law No. 5520:
“12- 1% on payments made by intermediary service providers and electronic commerce intermediary service providers, under Law No. 6563 of 23 October 2014 on the Regulation of Electronic Commerce, to service providers and electronic commerce service providers in connection with their activities under that Law.”