Summary: Turkey and the United States announced that they have reached an agreement
on implementations in the transition period prior to the introduction of the Two
Pillars approach announced by the OECD/G20 on 08.10.2021 for the taxation of
the digital economy.
On 8 October
2021, a statement issued by
136 countries
that are
members of the OECD/G20
Inclusive Framework stated
that a two-pillar solution
for the taxation of
multinational enterprises has
been agreed.
Pillar 1 allows
a portion
of the revenues of
multinational enterprises from
digital activities without
a workplace
in other
countries to be
taxed in
market (source) countries.
Pillar 2 envisages
a global
minimum corporate tax
rate. The
relevant regulations are
expected to come
into force
in 2023.
On October 21, 2021, the USA,
Austria, France, Italy, Spain and the United Kingdom announced that they had
reached a political agreement on taxation of digital service providers in the
transitional period before Pillar 1 was introduced. While the USA undertakes to
remove the measures it has taken for products to be imported from the specified
countries, other countries will allow tax credit for digital service taxes paid
by USA-based companies during the transition period against corporate tax liability
to be accrued in the source countries within the framework of Pillar 1.
On November 22, 2021, Turkey and
the United States agreed that the same conditions that apply within the scope
of the agreement dated October 21, 2021, mentioned above, will also apply
between Turkey and the United States in terms of Turkey's digital service tax
and the United States' commercial measures regarding digital service tax.
Turkey has been included by reference to the compromise between the USA and 5
other countries on October 21, 2021.
Turkey and the United States will
stay in close contact in order to have a common understanding on the
commitments under this agreement, and if there are differences of opinion on
this issue, they will try to resolve the situation through constructive
dialogue.
For any questions please contact vergi@kpmg.com.tr
Kind regards.
