306 NEWSLETTER 2021 facilities, fishing traps and casts, mines, quarries, construction sites, and steamboats.” Digital establishments are not included in the TPL. However, it is seen that tax administrations may interpret the concept of establishment broadly, based on the phrase “such as” in the relevant article, and incorporate digital establishment in the definition.5 This attitude may be argued to be against both the law and international tax treaties. In fact, as explained below, there are Tax Court decisions ruling that the taxation of profits of the digital advertising service providers, which do not have an establishment in Turkey, is against the law and international tax treaties. Rulings As of the effective date of the Resolution, in some regulations issued by the Revenue Administration, it is stated that payments made to the digital advertising service providers resident abroad are subject to a tax deduction: “Therefore, a tax deduction of 15% is required in accordance with the decision annexed to Resolution No. 476 over the payments to be made by your branch to the companies resident abroad as of 1/1/2019, regarding the online advertising services obtained from the companies resident abroad.”6 In another ruling dated August 12, 2020, the comment was left to the addressee along with explanations regarding the legislation: “If the company resident in Ireland is not comprised of an establishment in Tıurkey, the right to tax the business profits gained through the commercial activities only be5 “While making the definition of the establishment, the places used in the performance and execution of commercial, industrial, agricultural and professional activities were described and not limited to the places specified in the definition. Therefore, it is possible to consider the place used for communication purposes as an establishment for such activities carried out in electronic environment.” GDR’s ruling dated 20.03.2006 and numbered B.07.1.GİB.0.44/4402-302/019262. 6 GDR’s ruling dated 14.08.2020 and numbered 62030549-120[94-2019/120]- E.595945.
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