24.01.2022/3
Communiqué on the Exemption of Earnings in Social Content Creation and Application Development for Mobile Devices
Summary Income Tax General Communiqué Serial No. 318 on the Exemption of Earnings in Social Content Production and Application Development for Mobile Devices was published in the Official Gazette dated 12/1/2022 and numbered 31717. If the conditions in the Communiqué are met, no declaration will be submitted for these earnings.
With the repeated Article 20/B of the Income Tax Law No. 193 (Income Tax Law), the earnings of social content producers who share content such as text, image, audio, video over social network providers on the internet and the earnings of those who develop applications for mobile devices such as smartphones or tablets over electronic application sharing and sales platforms have been included in the scope of the exemption as of 01/01/2022, provided that they do not exceed the amount in the fourth income bracket of the tariff written in Article 103 of the Income Tax Law (880,000 TL for the year 2022).
The Income Tax General Communiqué Serial No. 318 regulating the application procedures and principles of the said exemption was published in the Official Gazette dated 12/1/2022 and numbered 31717. Explanations regarding the Communiqué are given below:
Persons Who Can Benefit from the Exemption:
Real persons who are social content producers who share content such as text, image, audio, video over social network providers on the internet and real persons who develop applications for mobile devices such as smartphones or tablets can benefit from the exemption, and corporate taxpayers cannot benefit.
It does not matter whether the taxpayers are full or limited taxpayers in the said exemption application.
Conditions for Benefiting from the Exemption:
In order to benefit from the exemption, such persons are required to open accounts in banks established in Turkey and collect all revenues to be obtained as a result of these activities through these accounts.
In this context, taxpayers who wish to benefit from the exemption are required to apply to the tax office authorized to levy in the place of their residence and obtain the “Exemption Certificate Regarding the Application of Repeated Article 20/B of Law No. 193” (Exemption Certificate) in Annex (1) of the Communiqué from the relevant tax offices regarding the activity within the scope of the exemption. Regarding the activities of the applicants within the scope of the exemption;
a) If there is an income tax liability in terms of commercial income before the application, it will be checked by the tax offices whether the registered activities of the taxpayers are in accordance with the activities within the scope of the exemption, and following the determination that these activities registered with the tax offices are among the activities exempted according to the provision of the aforementioned article or the establishment of the appropriate activity code, the exemption certificates will be issued to the applicants.
b) If there is no income tax liability in terms of commercial income before the application, exemption documents can be obtained after the establishment of the taxpayer for the activities within the scope of the exception.
In order to benefit from the exemption, the total revenue obtained from the activities within the scope of the exemption must not exceed the amount in the fourth income bracket of the tariff written in Article 103 of Law No. 193 (880,000 TL for 2022).
Transactions by Banks and Withholding Tax Application:
Within the scope of Article 20/B of the Law No. 193, the exemption certificate to be obtained from the tax offices will be submitted to the banks to be used in the opening of the account in which the revenues obtained by social content producers and application developers from these activities will be deposited.
It is possible to open more than one account due to the activity within the scope of the exemption, and all accounts opened within this scope must be notified to the tax office.
Banks will withhold 15% income tax on the amount of revenue transferred to the accounts opened within this scope as of the date of transfer.
Since withholding tax will be withheld from all payments deposited to the account within the scope of the exemption, the account to be opened should be used especially for the collection of the revenue within the scope of the exemption.
Banks will withhold income tax as of the date of transfer and will declare and pay the withheld taxes through withholding declaration within the framework of the principles set forth in Articles 98 and 119 of Law No. 193. In the event that the revenue obtained in a calendar year exceeds the amount stipulated in the Law, withholding tax will continue to be withheld over the amounts transferred to the account by the banks. Therefore, banks do not have any responsibility to check whether the amount exceeds the amount stipulated in the Law.
Since income tax withholding will be made over the amount of revenue obtained by the banks within the scope of the duplicate Article 20/B of the Law No. 193, income tax will not be withheld from the payments to be made to the beneficiaries of the exemption due to these activities by those who are obliged to make withholding in accordance with Article 94 of the Law No. 193.
The withholding tax on the earnings of the taxpayers who have the conditions for exemption will be the final taxation and no annual income tax return will be submitted by these persons, and if a declaration is submitted due to other income, these earnings will not be included in the declaration.
You can access the relevant Income Tax General Communiqué here.
Sincerely,
BİLGENER
