Turkey introduced Value Added Tax liabilities on non-resident providers of digital services to its consumers from January 2018. There is no VAT registration threshold, but there is a simplified registration process for foreign providers of digital or electronic services with the Turkish Revenue Administration. B2B services are treated under the reverse charge mechanism, with the Turkish business customer being responsible for reporting the VAT.
What e-services are liable to Turkish VAT?
There is no clear definition of digital services in Turkey. But practically, it include income from the following services liable to VAT:
- Downloads or streaming media
- Website hosting
- Telecoms data services, including texting
- Broadcast TV and radio
Check our global VAT and GST on digital services tracker to see which other countries have introduced indirect taxes on electronic services to consumers.
Determining if customer resident in Turkey
Non-resident providers must determine if their consumers are located in Turkey – or consuming the service there under the Destination Basis. They may reply on the following evidence:
- Customer billing address
- Telephone country code
- IP address of laptop, mobile phone etc
- Address of paying bank or credit card
Turkey VAT compliance for e-services
There is no VAT registration threshold in Turkey for resident or non-resident businesses. Providers must register for VAT with the Revenue immediately. This can be done online through a simplified registration process for e-services. As with regular Turkish VAT returns, foreign taxpayers should file quarterly returns (VAT Return form 3), due by the 26th of the month following the reporting period. Any VAT due should be paid at the same time. Returns must detail VAT due in local liras, based on the exchange rate of the Turkish central bank at the time of the supply. In periods where there are no transactions, a VAT return must still be filed.
Turkey operates a Partial Withholding VAT regime where non-residents provide services to taxable and non-taxable customers. However, this does not apply to digital services.
Europe VAT on digital services
|Country (click for details)||Rate||Date||Threshold||Comments|
|EU 27 member states||17% to 27%||Jan 2015||€10k EU residents; Nil for non-EU|
|Bosnia Herzegovina||17%||Jan 2023||BAM 50.000|
|Iceland||24%||Nov 2011||ISK 2 million|
|Norway||25%||Jul 2011||NOK 50,000|
|Russia||16.67%||Jan 2017||Nil||B2C & B2B|
|Switzerland||7.7%||Jan 2010||CHF 100,000 on global income|
|Ukraine||20%||Jan 2022||UAH 1m|