Do You Need to Pay Withholding Tax and VAT for GoDaddy Domain & Hosting in Turkey?

Do You Need to Pay Withholding Tax and VAT for GoDaddy Domain & Hosting in Turkey?

Purchasing domain names, hosting services, and other digital products from global providers like GoDaddy is part of everyday business for many Turkish companies. But when it comes to tax compliance, the big question often arises:
"Do I need to pay withholding tax and VAT on these purchases?"

The answer depends on the type of tax we’re talking about.

1. Withholding Tax (Stopaj) – Usually Not Applicable

Under the Turkish Corporate Tax Law (Article 30) and Income Tax Law (Article 94), payments made to non-resident companies for certain services may require a withholding tax deduction.

However, since GoDaddy is based in the United States, the Turkey–US Double Taxation Avoidance Agreement (DTA) comes into play. According to the treaty:

• If GoDaddy does not have a permanent establishment (such as an office or branch) in Turkey, payments for electronic services are not subject to withholding tax.

• This covers domain registrations, hosting plans, email services, SSL certificates, etc.

📌 Conclusion: No withholding tax is applied for GoDaddy domain and hosting purchases in most cases.

2. VAT via KDV-2 Return – Yes, You Must Pay

While withholding tax might not apply, Value Added Tax (VAT) rules tell a different story.
Under Turkish VAT Law (Articles 1 and 9):

• Services purchased from abroad and consumed in Turkey are considered service imports.

• For such services, VAT must be declared and paid via the KDV-2 return by the Turkish recipient.

For example:

• Domain registration fee: 1,000 TRY

• VAT (20%): 200 TRY (declared via KDV-2)

• If you are VAT-registered, you can deduct this VAT in your KDV-1 return.

3. Summary Table

4. Key Takeaways for Businesses

• No withholding tax for GoDaddy domain and hosting under the Turkey–US DTA (unless GoDaddy has a permanent establishment in Turkey).

• KDV-2 VAT declaration is mandatory if the service is used in Turkey.

• Keep all invoices and payment records for compliance and audits.

• If you are VAT-registered, you can deduct the VAT paid on these purchases.

💡 Pro Tip: Even if the invoice from GoDaddy doesn’t show VAT, you are still responsible for calculating and paying it in Turkey via the reverse charge mechanism.

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