Social media site Twitter pays no tax to Turkey since it has no permanent representative office in the country. But a new taxation formula has been devised for Twitter that allows it to avoid opening a branch in Turkey. Twitter will be liable to pay tax via the electronic company model, according to a story by the Turkish daily, Star.
The changes made in the Tax Procedure Law have made it possible to establish an electronic company, and opened the way for Twitter to pay tax. Thus, Twitter will pay the tax on the income it earns without opening an office in Turkey. Pointing out that the business office should be based in Turkey according to international tax practices, Finance Minister Mehmet Şimşek stated, "We have conducted some negotiations concerning this issue. When an office of a company is not located in Turkey, it creates problems in terms of taxation. The new law enforcement aims to fix such problems."
Stating that a new regulation would be imposed that would require Twitter to pay tax on the income it receives from advertisements, Şimşek said that "Twitter publishes advertisements from Turkey, which means taxpayers in Turkey advertise through Twitter and make their payments with tax included. Normally, if Twitter had an office in Turkey, it would have to pay tax to us, which is not the case right now." Turkey is not the only country that criticizes Twitter for tax evasion. It has faced renewed scrutiny by the U.K. tax authority after a Labor member of the British parliament criticized Twitter's lack of social responsibility.