Turkey introduces ‘electronic place of business’ concept

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Turkey introduces ‘electronic place of business’ concept

Turkey, as one of the founding members of the OECD and partner of the G20, is in full swing with the adoption of BEPS Project recommendations.

Six of the 15 key tools have already been translated  into law and other new legislative amendments in the context of BEPS are waiting to be enacted.

Meanwhile, Turkey is also modernising and simplifying its tax system and legislation by adopting international standards whereby the use of technology tools is strongly encouraged.

The use of technology and the internet is something to be welcomed, but the downside is that it has also opened opportunities for multinationals to avoid incorporation in the source state. 

However, Turkey is almost ready to reveal the ‘electronic permanent establishment’ concept to discourage the avoidance of a taxable PE presence of multinationals.

Profits are generally taxed where the economic activities occur and where the value is created. However, the internet has reshaped the global economy by allowing multinationals to shift towards a cross-border digital economy.

In particular, the increased delivery of services and goods conducted via electronic means has opened new opportunities for multinationals to avoid the pyhsical settlement in the source country to pay less tax, or avoid  it completely. 

This has resulted in a huge loss of revenue for governments that could be otherwise generated from multinationals active in the e-business environment.

Turkey’s legislation already contains anti-avoidance measures in line with the goals of the BEPS project against harmful tax planning and competition. 

Though, the supportive attitude of Turkey is also reflected in the e-commerce area along with thenew tax legislation, which will be unveiled soon.

As a result of new tax challenges of the digital economy, the Turkish government has recently introduced the draft of article 129 and 130 in the Tax Procedural Law No. 213 by introducing the concept of an ‘electronic taxpayer’ and 'electronic place of business’.  

This new draft legislation is a reflection of BEPS Action 7, which aims to prevent artificial avoidance of permanent establishment status by increasing the occasions on which a PE could be created. 

Hence, according to the draft of article 130 of the Turkish Procedural Law, the use of internet, intranet or other similar telecommunication tools for commercial, industrial or professional activities might create an electronic workplace allowing profits derived through these e-commerce activities to be taxed accordingly in Turkey. 

By revealing this new digital taxation formula, the compliance position of multinationals (especially of social media firms) in Turkey, who derive income from e-commerce activities targeted to Turkish individuals, will change completely. 

Ayse Devranoglu (ayse.devranoglu@wts-turkey.com / +90 212 347 4125) is a tax consultant at WTS Turkey, member of WTS Global

more across site & shared bottom lb ros

More from across our site

The reduction would still ‘leave room’ for pillar two and further reductions would be possible, one expert tells ITR
Funding from private equity house EQT will propel WTS Germany to compete with the ‘big four’, the firm’s leaders told ITR in an extensive interview
New Zealand is bucking the trend of its international counterparts with its investment-friendly visa approach. Here’s what high-net-worth investors need to know
However, nearly 10% of reports only disclosed activities in tax havens, according to the Fair Tax Foundation; in other news, Plante Moran sealed a US east coast merger
While pillar one is still alive, it will apply to a smaller group of companies, Brian Foley also told ITR
Tax teams that centralise and automate their pillar two data will have a much easier time during reporting season, says Hank Moonen, CEO of TaxModel
While GCCs drive efficiency for multinationals, they also present a host of TP risks that should be considered carefully
PwC Ireland has also called for simplifying Ireland’s tax code and a reduction in its capital gains tax in a pre-budget submission
Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Gift this article