307 TAX LAW long to Ireland, Turkey has no right to tax the said profits. However, if the activities measure up to create an establishment in Turkey, Turkey has also right to tax the profits, limited to the profits earned through the establishment. In this case, taxation will be performed in accordance with our domestic law provisions, and the tax paid in Turkey may be deducted under Article 23(1/a) entitled “Elimination of Double Taxation” of the Convention.”7 Court Decisions In practice, it is observed that many companies have applied to the judiciary demanding the cancellation of the withholding taxes paid with reservation. In general, it is observed that tax courts are in the tendency to cancel withholding taxes on the grounds that the workplace is defined as a fixed place in the CAPT, the establishment is physical in the TPL, and the interpretation of the establishment definition in domestic law and international tax treaties in a way so as to include the digital establishment, is against the prohibition of comparison. Conclusion The withholding taxes, introduced to accelerate the transition to the registered economy in digital environments, and to ensure tax security regarding digital advertising activities, is a heavy burden on companies with a high budget of digital advertising activities. This practice, whose legal basis is discussed and over which the courts and tax administrations disagree, will raise its importance gradually with the effect of the Covid-19 outbreak. 7 GDR’s ruling No. 50426076-130[37-2016/20-614]-59424, 12.08.2020.
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