Pursuant to the amendments introduced by the Law numbered 7524, dated 28 July 2024, to Article 94 of the Income Tax Law and Articles 15 and 30 of the Corporate Tax Law, payments made by intermediary service providers and e-commerce intermediary service providers to service providers and e-commerce service providers, within the scope of activities regulated under the Law on the Regulation of Electronic Commerce numbered 6563 (“Law numbered 6563”), have been subjected to income and corporate tax withholding.

In this context, the Presidential Decree numbered 9284 and dated 22 December 2024, stipulates that a 1% withholding tax rate will apply to payments made by intermediary service providers and e-commerce intermediary service providers to service providers and e-commerce service providers in relation to activities within the scope of Law numbered 6563.

The Revenue Administration’s announcement dated 22 December 2024 provides the following details regarding the implementation:

Individuals and Entities Subject to the Implementation:

• Real and legal persons engaged in e-commerce activities (service providers),
• Intermediary service providers facilitating the procurement of goods or services in e-commerce marketplaces.

Entities Obligated to Withholding Tax:

• Intermediary service providers (real and legal persons providing electronic commerce platforms),
• E-commerce intermediary service providers.

Entities with withholding obligations are required to deduct 1% from the payments they facilitate and declare and remit the relevant amounts to the tax office.

Tax Offset and Refund:

Income and corporate taxpayers will be able to offset the withheld taxes in their quarterly provisional tax returns. Any unutilized amounts may be refunded through the annual tax return.

This regulation will come into effect as of 1 January 2025.

For any questions or further information on this matter, please feel free to contact us.

Kind regards,
DT Law