Tax Exemption for Online Content Creators and App Developers in Turkey: What Foreigners Need to Know
Tax Exemption for Online Content Creators and App Developers in Turkey: What Foreigners Need to Know
Tax Exemption for Online Content Creators and App Developers in Turkey: What Foreigners Need to Know
As digital entrepreneurship continues to thrive globally, Turkey has introduced a favorable tax exemption framework for individuals earning income through online content creation and mobile app development. This regulation offers significant advantages for non-residents and foreigners monetizing their platforms via advertising, sponsorships, and subscriptions—especially those using platforms such as YouTube, TikTok, Instagram, or app stores.
Below is a structured guide to understanding how the Turkish tax exemption applies, who qualifies, and what compliance obligations are required.
Legal Basis: Article 20/B of the Income Tax Law
Effective from January 1, 2022, Article 20/B (revised under Law No. 7491) exempts certain types of income earned by individuals operating in digital spaces from income tax, provided that annual gross revenue remains within a threshold.
Annual Income Threshold:
| Year | Maximum Exempted Gross Revenue |
| 2024 | TRY 3,000,000 |
| 2025 | TRY 4,300,000 |
Who Qualifies for the Exemption?
Individuals (residents or non-residents alike) engaged in the following activities may benefit:
Sharing text, images, audio, or video on social networks or platforms (e.g., YouTube, Instagram, TikTok).
Offering personal services such as online courses, training, data analysis, or product demonstrations via electronic means.
Developing and monetizing applications on electronic distribution platforms (e.g., Google Play, App Store).
⚠️ Important: This exemption is not available to corporations or legal entities subject to corporate tax.
What Income is Covered?
| Covered Income Sources | Not Covered |
| Paid app downloads | Offline or intermediary services |
| In-app purchases | Revenues not collected via a Turkish bank account |
| Advertising revenue via app stores or social platforms | Revenues exceeding the threshold without declaration |
| Sponsorships | Activities conducted through partnerships |
| Subscriptions and donations | Revenues collected without exemption certificate |
Key Compliance Requirements
To be eligible for the exemption, the following conditions must be met:
Open a Turkish Bank Account: All income must be collected through an account at a bank established in Turkey.
Obtain an Exemption Certificate: Apply to the tax office based on your registered residential location for a certificate confirming your eligibility under Article 20/B.
Declare Your Bank Information: Within one month of opening or designating the bank account, notify your tax office of the bank name, branch, and IBAN.
Separate Business Activities: If the taxpayer engages in other commercial or professional activities, revenue and expenses from exempt activities must be accounted for separately.
Withholding Tax Obligations for Banks
Banks are required to:
Withhold 15% income tax on deposits made to exempt accounts.
File and remit withheld taxes via the “Withholding and Premium Service Declaration.”
Track income in foreign currency by converting it using the exchange rate on the transaction date.
Note: The withheld tax is final and cannot be offset against other income tax liabilities.
Documentation and Record-Keeping
Taxpayers benefiting from the exemption are exempt from bookkeeping and invoice issuance obligations, only if their income does not exceed the threshold.
However, if they engage in other business activities, standard accounting and tax documentation duties continue.
All relevant receipts and purchase invoices must be retained for at least five years.
Partial Use or Violation of Conditions
If the taxpayer:
Fails to open a Turkish bank account,
Fails to collect all income through the declared account,
Violates any other conditions of the exemption,
Then the income will be retroactively taxed with late interest and penalties imposed by the tax authority.
VAT Exemption on Services
As per Article 17/4-a of the Turkish VAT Code:
Deliveries and services that fall under the Article 20/B exemption are not subject to VAT.
This includes digital content services, app sales, online training, and promotional services—provided they qualify under the income tax exemption.
Special Note on Partnerships
The exemption does not apply to income earned through joint ventures (i.e., "adi ortaklık") even if the partners are natural persons. However, if the activity is conducted individually by the partner (not through the partnership), the exemption may still apply.
Mid-Year Qualification and Pro-Rata Declaration
If an individual qualifies for the exemption partway through the year:
Revenue prior to qualification is subject to annual declaration.
Revenue earned after the exemption certificate date can be treated as exempt.
Separate tax filings may be required for the pre-exemption period.
Exceeding the Threshold
If the total income in a calendar year exceeds the applicable threshold (TRY 4.3 million in 2025):
The entire income becomes subject to annual income tax.
However, the 15% withheld by the bank may be credited against the final tax liability.
Conclusion: Why This Matters for Foreign Creators
This exemption regime is a rare example of a clear, streamlined taxation policy for digital entrepreneurs. For foreigners monetizing content or apps in or from Turkey, it provides a competitive and low-compliance-entry pathway to operate legally—provided the bank account and threshold rules are carefully followed.
Failure to comply results not only in taxation of prior earnings but also in penalties and interest, which could quickly erode profits. Consulting with a local tax advisor or accounting expert before entering the Turkish digital market is highly recommended.
Thinking of Launching Your App or Content Platform in Turkey?
📩 Contact our team at info@ozmconsultancy.com to assess your eligibility and start the process correctly.
