Turkey introduces ‘electronic place of business’ concept

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

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 Singapore boutique tax law firm’s chief told ITR of the ex-Baker McKenzie lawyers playing a role in the initiative as well as its desire to expand geographically
The new tax regime is a significant reform that will bolster India's semiconductor and electronics manufacturing ecosystem, says Khaitan & Co
Gavin Kliger, a DOGE software engineer, is reportedly set to work at the IRS for 120 days
The Royal Bank of Canada’s success over HMRC represents a milestone in the interpretation of double tax treaties, Norton Rose Fulbright partner Dominic Stuttaford said
Experts from African law firm Bowmans outline the challenges that companies operating across the continent face to stay tax compliant amid legislative upheaval and US pressure
The OECD said the EU nation relies too heavily on corporate tax from multinationals; in other news, Squire Patton Boggs, Skadden and KPMG all made senior tax appointments
An OECD webinar on amount B also heard that a distributor’s compliance certifications could potentially move them out of scope
The appointment of ex-PwC partner Abhijit Ghosh follows that of ex-EY partner James Badenach as head of A&M Tax for APAC last year
Tax controversy specialist Matthew Sharp’s switch to Brown Rudnick follows hot on the heels of US counterpart Skadden’s appointment of a new London tax disputes head
Led by international law firm Hughes Hubbard, SKAT was awarded $500 million in damages after several defendants were convicted of fraud, negligence and unjust enrichment
Gift this article