A significant tax relief for global digital service providers has officially commenced in Türkiye. Following the Presidential Decision No. 10767, the Digital Services Tax (DST) rate, which previously stood at 7.5%, has been reduced effective from January 1, 2026. This move marks the first step of a two-phase reduction plan aimed at digital giants such as Meta, Google, and X (formerly Twitter). New Tax Rate Schedule The reduction is structured to decrease the tax burden on non-resident digital service providers over the next two years: Effective Jan 1, 2026: The DST rate is reduced from 7.5% to 5%. Effective Jan 1, 2027: The rate will be further reduced to 2.5%. Note: For revenues generated in December 2025, the previous 7.5% rate remains applicable. Exemption Thresholds for 2026 Not all digital service providers are subject to this tax. According to Law No. 7194, companies are exempt from DST if they meet either of the following criteria in the preceding accounting period: Local Revenue: Revenue derived in Türkiye is less than TRY 20 million. Global Revenue: Worldwide revenue is less than EUR 750 million (or its equivalent in TRY). For companies belonging to a consolidated group, the total group revenue is considered when evaluating these thresholds. Key Principles of Calculation The Digital Services Tax operates on a gross revenue basis, distinguishing it from corporate tax models based on net profit: No Deductions: Taxpayers are prohibited from deducting expenses, costs, or other tax elements from the DST base. Currency Conversion: Revenue obtained in foreign currency must be converted using the Central Bank of the Republic of Türkiye (CBRT) buying rate on the date the revenue is earned. Invoicing: The tax is not shown as a separate line item on invoices; it is calculated, declared, and paid directly by the service provider. Impact on Content Creators and the Market The reduction in the tax burden for global platforms has sparked discussions regarding its impact on local ecosystems. Industry experts are monitoring whether these companies will reflect the 2.5% tax saving in their payments to content creators and digital publishers in Türkiye. Practical Example for 2026 If a non-resident digital advertising firm earns TRY 1,000,000 in gross revenue in February 2026: Tax Base: TRY 1,000,000 New Rate: 5% Tax Payable: TRY 50,000 (Previously TRY 75,000 at the 7.5% rate). Source: TurkStat Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither MuhasebeNews nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.