Turkey Lowers Digital Services Tax Rate 2026

On December 25, 2025, the Presidential Decree No. 10767 (Decree), which significantly changes the Digital Services Tax (DST) rate in 2026 and 2027, was published in the Official Gazette. The Decree provides a plan to decrease the DST rate gradually, and was adopted against Turkey's Nationalist Movement Party (MHP) proposal to increase the DST rate from 7.5% to 12.5%.

Phased Reduction of DST Rate

With the publication of the Decree and reduction of DST rate in 2026 and 2027, Turkey marked a significant policy shift in its approach to taxing the digital economy. Under the adopted and published Decree, Turkey reduced the DST rate to 5% on January 1, 2026, and will reduce it by another 2.5% on January 1, 2027. Once the phased decrease is completed, the final applicable DST rate will be 2.5%.

Turkey introduced the DST in 2020, seeking to tax value created in the digital economy by imposing a tax on gross revenues from digital advertising, online content, and platform-based intermediation services. However, the country set a significantly high initial rate, which, at the time, reflected both revenue considerations and the absence of a comprehensive international solution for taxing digital business models.

The scope of the Turkish DST remained unchanged by the latest Decree. It will continue to apply to service providers that exceed both a domestic TRY 20 million (nearly EUR 400,000) and a global EUR 750 million or the equivalent amount in TRY revenue threshold. 

Notably, the DST applies irrespective of whether the service provider is a Turkish resident, has a permanent establishment there, or conducts its activities entirely from abroad. Nonetheless, once the thresholds are exceeded, the DST liability arises solely from the generation of in-scope revenues in Turkey.

Conclusion

The Decree applies to revenues generated as of January 1, 2026, and does not have any retroactive effect on prior periods. For digital service providers, the change in the applicable DST rate has a broadly positive impact, as lower rates directly reduce the effective tax burden on gross revenues derived from digital activities in Turkey. Additionally, the decision to reduce the DST rate signals a softer regulatory stance toward the digital economy.

Source: Turkish Revenue Administration, EY