Attention content creators: A new era in the taxation of social media income

The simplified taxation practice introduced for those producing content on social media will now cover those providing services such as individual courses, data processing and development, and product promotion via the internet and similar electronic environments.

The "Communiqué on Amendments to the General Communiqué on Income Tax" issued by the Revenue Administration of the Ministry of Treasury and Finance has been published in the Official Gazette, effective as of January 1, 2024.

The communiqué regulates taxation procedures for social content creators and mobile application developers.

Accordingly, the earnings of social content creators and mobile application developers are subject to tax as commercial income. In order to ensure efficiency, effectiveness, and tax security in taxation, simpler taxation methods can be determined for certain activities and income components.

In this context, the earnings of social content creators and those operating in the field of mobile application development have been taxed using a simplified method since January 1, 2022.

With the amendment, the scope of those who can benefit from the simplified taxation opportunity has been expanded, effective from January 1, 2024, to ensure security in taxation and increase voluntary compliance.

Earnings obtained through the sharing of content such as text, images, audio, and video on websites and similar electronic environments have also been included in the scope.

Earnings obtained through the sharing of content such as text, images, audio, and video via social network providers are exempt from income tax. With the regulation, the opportunity to benefit from the exemption has also been provided in cases where these services are provided on websites and similar electronic environments other than social network providers.

THEY WILL BE TAXED VIA WITHHOLDING BY BANKS

Earnings of those providing services such as individual courses, data processing and development, and product promotion via the internet and similar electronic environments are also subject to tax as self-employment income or commercial income.

With the regulation, earnings obtained from services such as providing individual courses, data processing and development, and product promotion via the internet and similar electronic environments have also been included in the scope of the simplified taxation method.

Thus, taxpayers who wish to benefit from this taxation convenience have been provided with the opportunity to open accounts at banks established in Turkey to collect all the revenue they obtain from their activities and to be taxed through a 15 percent withholding tax applied by the banks on the revenue amounts deposited into the bank.

HOW ARE SOCIAL MEDIA CONTENT CREATORS TAXED?

These taxpayers are required to obtain an "Exemption Certificate Regarding the Application of Article 20/B of Law No. 193" from the tax office where their residence is located and to open a bank account with this exemption certificate. An existing bank account can also be designated and used for this purpose.

All revenue obtained within the scope of these activities is mandatorily deposited into the opened account. Banks then deduct a 15 percent tax on all money deposited into these accounts and transfer this deduction to the tax office.

If these conditions are met, the earnings of social content creators and mobile application developers are accepted as being within the scope of the exemption.

The tax paid by content creators on their revenue becomes the final tax, and they do not need to file a tax return.

Those whose earnings exceed the amount in the 4th income bracket of the income tax tariff (3 million liras for 2024) are required to file a tax return and pay tax according to the tariff.

Those who file a tax return can also calculate the tax on their net earnings by deducting their documented expenses. They can also offset the 15 percent deduction made by banks on their revenue.

In this context, social content creators and mobile application developers are taxed via the simplified withholding method without being subject to obligations such as issuing invoices, keeping books, or filing tax returns, provided the limit is not exceeded.

News Source: AA