Digital Service Tax in the European Union and Turkey Practice
Muhammet DurduThe development of information and communication technologies has led to a serious transformation in the economy. Before this change, which accelerated with the 21st century, the economy was based on brick and mortar trade, while today it is increasingly based on bit and byte technology. This situation has caused the system to not work properly as the tax system is based on concrete and physical jobs. International organizations such as the OECD, IMF and EU are working towards joint action since unilateral measures taken by states may cause tax wars. Hovewer, it is difficult to reconcile countries with very different interests in a common solution. In this study, the Digital Services Tax (DST) proposed by the EU to implement interoperability between EU countries as a temporary solution, was examined and the Digital Services Tax reflections in Turkey was interpreted. Unilateral taxes have begun international tax wars, even though they are still in their infancy. While the majority of states recognize the necessity of a fundamental and long-term solution, they are introducing new types of taxes or taxation methods to protect their taxation rights. The Digital Service Tax is one of them.For Turkey, rather than short-term applications, it is recommended that the tax system be made compatible with digital technologies. The process of enacting Digital Service Tax has been criticized is being too fast and The Digital Services Tax does not have an independent code. It is stated in the doctrine, as cited in this study, that the tax rate is much higher than the EU examples. How to ensure compliance with taxation has been put forward as an important problem. The imposition of internet access restrictions on digital service providers that do not comply with taxation by executive decision has been identified as an advanced legal study. As a result, it is concluded that regulatory impact analysis of the Digital Services Tax Code is unsatisfactory in Turkey.
Avrupa Birliği’nde Dijital Hizmet Vergisi ve Türkiye Uygulaması
Muhammet DurduBilgi ve iletişim teknolojilerinin gelişmesi, ekonomiyi ciddi bir dönüşüm içerisine sokmuştur. 21’inci yüzyıl ile hızlanan bu değişimden evvel ekonomi, tuğla ve harç ticaretine dayanmakta iken günümüzde giderek yoğunlaşan bir şekilde bit ve byte teknolojisine dayanmaya başlamıştır. Bu durum vergi sisteminin gereği gibi çalışmamasına sebep olmaktadır. Zira vergi sistemi, sanal işlere göre değil somut ve fiziki işlere göre tesis edilmiştir. Devletlerin bu sorunlara tek taraflı önlem alması vergi savaşları doğurabileceği için OECD, IMF, AB gibi uluslararası kuruluşlar ortak hareket etme yönünde çalışmalar yapmaktadır. Fakat çok farklı çıkarları bulunan ülkeleri ortak bir çözümde uzlaştırmak zor olmaktadır. Bu çalışmada AB’nin, AB ülkeleri arasında geçici bir çözüm olarak birlikte uygulanması için teklif ettiği Dijital Hizmet Vergisi (DHV) incelenmiş ve bunun Türkiye’ye yansıması tahlil edilmiştir. Tek taraflı konan vergiler henüz başlangıç aşamasında olmasına rağmen uluslararası vergi savaşlarını başlatmıştır. Devletlerin çoğunluğu temelden ve uzun vadeli bir çözümün gerekliliğini kabul etmekle birlikte vergilendirme haklarını koruyabilmek için yeni tür vergiler veya vergilendirme yöntemleri ortaya çıkarmaktadır. Dijital Hizmet Vergisi de bunlardan biridir. Türkiye açısından, kısa vadeli uygulamalar yerine, vergi sisteminin dijital teknolojilere uygun hale getirilmesi yönünde çalışmalar yapması tavsiye edilmektedir. Dijital Hizmet Vergisi’nin kanunlaştırma sürecinin hızlı olması ve müstakil bir kanuna sahip olmaması eleştiri konusu yapılmıştır. Vergi oranının AB örneklerinden çok yüksek olduğu belirtilmiştir. Vergiye uyumun nasıl sağlanacağı önemli bir sorun olarak ortaya konmuştur. Vergiye uyum sağlamayan dijital hizmet sağlayıcılarına idare kararıyla internet erişimi engeli konması, ileri bir hukuki çalışma konusu olarak tespit edilmiştir. Netice itibariyle, Türkiye’de Dijital Hizmet Vergisi Kanunu’nun düzenleyici etki analizinin yetersiz olduğu sonucuna varılmıştır.
International tax treaties are created according to the classical economy which requires a physical and stable workplace for an enterprise to be taxed in a country where it operates. The reasons for this imperative are: slow communication, exchange and customs rules, and high transportation costs. With the development of information and communication technologies (especially internet technology), international companies have had the opportunity to operate in most countries without creating a physical or stable workplace. This situation results in the state’s inability to tax the internet mediation company if a tradesman in his country sells his product to a person in his country via the internet mediation company. The same conclusion can be reached for social media companies and other digital companies. Regarding the situation in terms of indirect taxes, it is difficult for the government to receive VAT from a company that sends a product from abroad to its citizens in its own country. Although making the consumer responsible in this regard stands out as a solution, implementation problems may arise. These situations lead to the inability of states to exercise their taxation authority, which is one of the most important sovereign rights, which is unacceptable for many states in terms of economic conditions. For this reason, it is seen that many states are trying to tax such incomes unilaterally. On the other hand, states hosting digital companies such as the USA, threaten to retaliate against these taxes. As a result, it is stated in the doctrine, as cited in this study that there is a kind of tax war between the countries.
It is clear that such tax wars will ultimately cause an economic damage to all states. For this reason, international organizations are working to prevent unilateral taxation. In this context, BEPS plans carried out by the OECD aim to find a fundamental solution to this problem. However, no update has been made to the OECD Model Tax Agreement, which is based on countries making international tax treaties. This Model Agreement still requires the existence of a physical workplace for taxation. Also, works have been started to find a solution to tax losses caused by the digital economy within the European Union. In this context, the EU wants to end the tax losses of the member states as soon as possible and is seeking a deep-rooted solution. The Digital Service Tax (DST) is the EU proposal to prevent short-term tax losses. In the proposal, it is stated that this tax is a temporary measure and will be abolished when the international solution for the taxation of the digital economy is reached. The tax foresees a 3% ratio on gross income and targets only certain sectors. However, since no compromise has been reached within the EU, some EU states, especially France, have implemented a similar tax unilaterally. The United States, being against such unilateral practices, has declared that it will retaliate.
While the debate about the Digital Services Tax is continuing in the EU, Turkey quickly legislated Digital Services Tax in last quarter of 2019. In Turkey, the tax rate adjusted at 7.5% of gross revenues and the application area of the Digital Services Tax is wider than the EU proposal. In this respect, the tax burden on enterprises which are subject to the Digital Services Tax, has become more severe in Turkey. In addition, in order to ensure tax compliance, the executive body has been given the authority to decide on blocking internet access to companies that do not fulfill their tax obligations. For these reasons, a different and controversial Digital Service Tax has emerged in Turkey. Considering the 15% withholding application implemented on digital advertising services at the beginning of 2019 in Turkey, it is likely that a serious problem of system complexity and double taxation will occur. In this study, it is stated that the withholding tax application put into digital advertising services should be abolished in the short term, and making the tax system compatible with the digital age in the long term.
