WHERE DID THE DIGITAL SERVICE TAX COME FROM?

Barış ŞENTÜRK
Analyst

Humanity, who first connected the world with iron networks, then intertwined these ties with the internet in such a way that it gave rise to multinational, billion-dollar companies that exist only on virtual networks today, do not produce any physical products, and whose headquarters are just a mailbox in countries like the "Tax Paradise" Malta.

These companies earn billions of dollars in annual income by selling products and renting their services in multiple countries simultaneously, without making any investment. With their billion-dollar earnings, they grow their capital, increase their R&D opportunities, and become unrivaled in their sectors.

So do these companies pay taxes?

Even US President Trump has criticized American companies for not paying taxes and not being beneficial to their countries. The fact that they make a profit but do not include these profits in the tax system of the relevant countries also attracted the attention of the European Union in 2018.

When the European Union could not agree with the Economic and Financial Affairs Council held in Brussels to discuss a new tax regulation to be applied to technology companies, France began to implement a new law on its own. Accordingly; Companies whose annual income in France exceeds 25 million Euros or whose annual international income exceeds 750 million Euros will pay a 3% tax on their income in France.

Following these developments, the implementation of the Digital Services Tax in our country was also accepted by the commission. It is pleasing for our country that companies such as Google, Facebook, Netflix, and Spotify are among the companies that will pay taxes. According to this regulation; Companies with revenues of more than 20 million Turkish liras from Turkey or more than 750 million Euros worldwide will pay a 7.5% tax. Companies that do not accept to pay tax may have their access to the internet blocked.

The globalizing world economy is forcing countries to make new tax regulations. For this reason, while following technological developments, it is also very important to follow the tax regulations that are being discussed and worked on in other countries. Digital Service Tax is a step taken by the current government to ensure competition in this period when local companies are gaining importance.

In the upcoming period, all other sectors should also follow what kind of sanctions will be imposed on technology companies. Shortly, an "Internet Tax Regulation" that all countries of the world will accept will not be surprising.