Twitter, Facebook to pay tax in Turkey

ANKARA - Anatolia News Agency

Online search engines and social networks earn more and more from their online ads. DAILY NEWS photo

The Turkish Finance Ministry has sped up its work to collect taxes from the online advertising market. The initiative focuses on collecting taxes from various foreign-based websites, which have considerable online advertising revenues, like Facebook and Twitter. 

“Every enterprise that earns money in Turkey will pay tax in Turkey, including Facebook, Twitter and others. The online advertising market has now earned $1 billion, and 70 percent of the income goes abroad without being taxed,” Turkish Finance Minister Mehmet Şimşek said yesterday. Şimşek added that the ministry is about to finalize the related regulation draft to ensure the taxation of online advertisement revenue that is earned in Turkey, regardless of the origin of the company. 

Online search engines and social networks have earned more and more from their online advertisement services. Such websites generally withdraw the online advertisement payments by credit card and the money goes abroad instantly without being taxed, due to the commonly signed intergovernmental agreements by many countries to prevent double-taxation for companies. This is also case for Turkey. 

Google earns $45 billion annually from its online ads, around $22 billion to 23 billion of this is from Europe but the exact number for Turkey is not known. 

“We think that such revenues should be taken as service revenues but not business income because there are not any goods traded here. We can thus collect such revenues by excluding them from the intergovernmental agreements” Şimşek added.