304 NEWSLETTER 2021 termediaries to be paid are obliged to withhold tax according to the tax laws, whether the subject of the payment is the purchase and sale of goods or services, or whether the sale or services are carried out electronically. The President, based on this authority, has included advertising services provided on the internet within the scope of income/ corporate tax withholding through Resolution No. 476 (“Resolution”), dated December 18, 2018.2 Accordingly, as of January 1, 2019, it has been decided to apply withholding tax in relation to the payments made to those who provide digital advertising services or intermediaries providing the service. Pursuant to the Resolution, the withholding tax rate has been determined as: • 15%, if paid to real persons under Article 94 of Income Tax Law No. 193, • 0%, if paid to the companies established in Turkey under Article 15 of Corporate Tax Law No. 5520 (“CTL”), • 15%, if paid to the companies that do not have a permanent establishment in Turkey (limited taxpayer) under Article 30 of the CTL. Details of the regulation are introduced in Corporate Tax Communiqué Serial No. 17, amending Corporate Tax General Communiqué Serial No.1. Conventions for the Avoidance of Double Taxation The implementation of withholding taxes at the rate of 15% on the advertising fees paid to the digital advertising providers established abroad (limited taxpayers) has sparked a debate, especially regarding the Conventions on the Avoidance of Double Taxation (“CADT”). Against the rule of taxing commercial earnings only in the country of origin, the question of how the Turkish Revenue Administration will enforce the Resolution has arisen. 2 OG No. 30630, 19.12.2018, https://www.gib.gov.tr/sites/default/files/fileadmin/ user_upload/Cumhurbaskani_Karari/476_vuk_ck.pdf.
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