In the face of the inadequacy of conventional domestic and international tax regimes toward the global digital economy’s accelerating growth, Türkiye’s first major attempt to tax the digital economy was to conduct tax audits on several nonresident digital companies operating in Türkiye.
Since 2017, the TTA argued during those tax audits that companies’ websites or other digital platforms, per se, can constitute a PE in Türkiye without requiring a physical presence (such as a server) in Türkiye. Based on these virtual PE assertions, the TTA made significant tax assessments on nonresident digital companies in terms of corporate income tax, advance tax (a type of advance corporate income tax), dividend withholding tax and VAT, along with tax-loss penalties and delay interest.
Source Baker & McKenzie
