E-Commerce Withholding Tax Guide 2025

E-commerce withholding tax is a type of tax applied to the income of businesses operating in the e-commerce sector in Türkiye. This tax is collected by deducting a certain percentage from earnings generated through sales on e-commerce platforms and transferring the amount to the state treasury.

As the e-commerce sector continues to grow rapidly, this practice has become an important financial consideration for both sellers and buyers, particularly as a measure to prevent tax losses. In this article, you will find answers to the most frequently asked questions about e-commerce withholding tax.

What Is Withholding Tax?

Withholding tax is the process of deducting tax from income subject to income or corporate tax at rates determined by law before the income is paid to the recipient and remitting the deducted amount to the tax office. In other words, when income is generated, a portion of it is withheld as tax and transferred to the tax authorities. This allows tax collection to be carried out more easily and efficiently.

Withholding tax may apply to various types of income, including wages, rent, and interest. For example, a certain amount of tax may be withheld from an employee's salary, a landlord's rental income, or an investor's bank interest income. The main purposes of withholding tax are to prevent tax evasion, facilitate tax collection, and make budget planning more reliable. Through this system, the government can better estimate total tax revenues and allocate the resources required for public services more effectively.

E-Commerce Withholding Tax

E-commerce withholding tax is a type of tax introduced for transactions carried out through online sales platforms, effective from 2025. Under the new regulation introduced by Law No. 7524, intermediary service providers and electronic commerce platforms are required to begin withholding tax on payments for which they act as intermediaries in the sale of goods and services.

For example, major e-commerce platforms such as Hepsiburada and Trendyol may apply tax withholding to payments made to businesses selling goods and products through their platforms. The purpose of this regulation is to prevent the informal economy and promote greater transparency in e-commerce transactions.

The legal regulation entered into force in August, while the implementation of tax withholding by e-commerce platforms was postponed until January 1, 2025. Although the regulation initially did not specify the withholding rate, the latest decision published in the Official Gazette set the withholding rate at 1% for payments made through e-commerce platforms as of January 1, 2025. The withheld amounts can be offset against income or corporate tax liabilities through the relevant tax returns.

Another regulation concerns dividend payments. The withholding tax rate applied to dividends was increased from 10% to 15%. Dividends distributed by fully liable resident corporations are subject to income and corporate tax withholding.

Although individuals are exempt from income tax on half of their dividend income, the remaining amount must be declared through an annual tax return if it exceeds the relevant threshold under the income tax tariff (TRY 230,000 for 2024). In addition, withholding tax applied to non-resident individuals and corporations, as well as entities exempt from income tax, is considered final tax.

Purpose of E-Commerce Withholding Tax

The purpose of e-commerce withholding tax is to prevent tax losses in the rapidly growing e-commerce sector and increase tax revenues.

Making sales conducted through e-commerce platforms more transparent.
Facilitating tax audits and preventing tax evasion.
Ensuring that all e-commerce businesses are subject to the same tax obligations.
Eliminating tax disparities between traditional commerce and e-commerce.
Increasing tax revenues generated by the rapidly growing e-commerce sector.
Contributing to the state budget.
Making the e-commerce sector more organized and transparent.
Creating fairer competitive conditions within the sector.

E-commerce withholding tax can be considered an important regulation that marks a new era in the e-commerce sector. It may lead to certain changes for both sellers and consumers. Depending on how the tax is implemented and its effects, the emergence of an additional cost item for sellers may result in higher product prices.
Competition may also become more challenging for small-scale sellers with lower tax burdens. As tax audits in the e-commerce sector may become more frequent, it will become increasingly important for sellers to maintain accurate and organized records.

What Amount Is E-Commerce Withholding Tax Deducted From?

The calculation of e-commerce withholding tax is based on the sales amount excluding VAT. In other words, when you sell a product or service, the withholding tax is calculated based on the VAT-exclusive sales price at the applicable rate (25% or 15%). But why is the VAT-exclusive amount used?

VAT (Value Added Tax) is a type of tax added at each stage of the production and distribution process. Withholding tax, on the other hand, is applied directly to the underlying value of the sale rather than to the added tax amount. This prevents the same tax from being applied twice.

How Is E-Commerce Withholding Tax Calculated?

In e-commerce transactions, withholding tax is calculated based on the type of business and the VAT-exclusive sales amount. An e-commerce business is required to withhold a certain amount of tax from the proceeds of the products or services it sells and fulfill its tax obligations accordingly. The applicable rate may vary depending on the type of business. Differences between sole proprietorships and limited or joint-stock companies can directly affect the withholding tax rates.

For example, if a sole proprietorship makes a VAT-exclusive sale of TRY 20,000 through an e-commerce platform and a 25% withholding tax rate applies, TRY 5,000 is withheld, leaving the business with a net payment of TRY 15,000. For a limited or joint-stock company making the same sale, a lower withholding rate of 15% would apply. In this case, TRY 3,000 would be withheld, and the company would receive TRY 17,000.

For a larger sale amount, such as TRY 40,000, the withholding tax for a sole proprietorship at a rate of 25% would be TRY 10,000, resulting in a net payment of TRY 30,000. For a limited or joint-stock company making the same sale, a 15% withholding tax would apply, resulting in a TRY 6,000 deduction and a net payment of TRY 34,000.

E-commerce businesses must calculate these withholding amounts accurately, fulfill their tax obligations, and make the required tax payments on time. If a sale is returned, the withholding amount deducted should also be refunded. In some cases, the withholding amount may be treated as a provisional tax payment. Sellers are required to report these withholding amounts on their annual income tax returns.

Which Transactions Will Be Covered?

E-commerce withholding tax is an important issue for businesses operating in the e-commerce sector and may be subject to changes as tax legislation is updated. These changes can create uncertainty regarding which transactions will be subject to withholding tax.

E-commerce withholding tax is intended to apply within a broad framework to businesses conducting online sales. This includes brands and entrepreneurs selling products or services through e-commerce platforms or their own websites. Accordingly, businesses engaged in e-commerce may be required to fulfill withholding tax obligations when offering their products for sale in digital environments. The new regulation also introduces tax registration requirements for businesses conducting online sales.

Personal sales made by individuals who are not registered taxpayers
Payments made using cash on delivery
Payments made through POS terminals

Certain transactions are exempt from withholding tax. Personal sales made by individuals who are not registered taxpayers are not included within this scope. In addition, payments made through cash-on-delivery and POS transactions are also excluded from withholding tax. These payment methods are among the transactions outside the scope of the e-commerce tax regulations.

An important detail for e-commerce platforms is that, under the new withholding tax regulation, platforms are responsible for making the relevant tax deductions on behalf of sellers and submitting the necessary tax returns to the relevant government authorities.

Brands selling through their own websites, on the other hand, are responsible for preparing their tax returns, typically with the assistance of an accountant, and fulfilling their withholding tax obligations. In this way, transactions subject to e-commerce withholding tax are governed by specific rules, ensuring that businesses fulfill their tax responsibilities.
There are also certain advantages and disadvantages associated with being exempt from e-commerce withholding tax.

Advantages:

Reduced tax burden.
Fewer bureaucratic procedures.
Lower costs.

Disadvantages:

Growth may be limited due to income thresholds.
There may be a risk of being unable to benefit from certain government incentives.
Eligibility for exemption must be monitored continuously.

Tax exemption status may change depending on an individual's income, business activity, or other circumstances. Therefore, it is important to regularly monitor exemption eligibility and make the necessary notifications when required.

Will Excess Taxes Paid at the End of the Year Be Refunded?

Under the e-commerce withholding tax regulations, sellers may be eligible for a tax refund if they have paid more tax than required by the end of the year. Sellers who have overpaid due to withholding tax may apply to the Revenue Administration for a refund. The refund process may be facilitated with the support of e-commerce marketplaces, allowing sellers to complete the process more quickly and smoothly. This system aims to prevent potential disruptions in the tax refund process from negatively affecting sellers' financial positions.

By calculating withholding amounts accurately, sellers can recover excess tax payments and manage their cash flow more effectively. Support provided by e-commerce marketplaces can also simplify tax refund applications and help complete the procedures more efficiently. This regulation enables sellers to calculate their annual tax liabilities more accurately while minimizing potential issues arising from tax refunds and supporting more effective financial planning.

What Will the E-Commerce Withholding Tax Law Change?

The e-commerce withholding tax law is an important regulation that affects businesses operating in the e-commerce sector in Türkiye. The regulation aims to clarify the withholding tax system applied to income generated from sales through e-commerce platforms, address tax disparities within the sector, and increase tax revenues.

The regulation may bring various changes, including adjustments to withholding tax rates, expansions or reductions in its scope, new rules concerning tax filing and payment procedures, increased record-keeping requirements, and changes to penalties and sanctions. These measures may allow the government to improve budget planning while helping e-commerce businesses operate within a fairer tax system.

However, such changes may also increase business costs and require adjustments to existing operational processes. Therefore, all e-commerce businesses should closely monitor developments in tax legislation and seek professional advice when necessary to take the appropriate measures.

Importance of E-Commerce Withholding Tax

E-commerce withholding tax aims to prevent tax losses in the e-commerce sector and increase tax revenues. With the implementation of this tax:

Withholding conducted by platforms facilitates tax audits.
Small-scale sellers become more aware of their tax registration and compliance obligations.
It contributes to the state budget.

E-commerce withholding tax is an important issue for businesses operating in the e-commerce sector. Sellers should have a thorough understanding of the applicable tax rules, calculate withholding amounts accurately, and fulfill their tax obligations properly.