330 NEWSLETTER 2021 returns. These taxpayers also have other tax liabilities such as bookkeeping and document issuance liabilities.6 Under Article 94 of the ITL, neither those who benefit from the exemption nor those who do not are liable to withhold tax on payments such as wages and rents. Application for Exemption from Value Added Tax (“VAT”) Through Law No. 7338, an exemption is stipulated on Law No. 3065 on VAT (“VAT Law”) regarding social media incomes. Accordingly, the phrase “delivery and services subject to taxed earnings within the scope of repetitive Article 20/B of the same Law” has been added to Article 17/4/a of VAT Law. Through this regulation, deliveries and services subject to earnings which are taxed through withholding and are exempt from income tax, are also included in the VAT exemption. Issues with the Recent Regulation • Although the recent regulation on the taxation of social media content producers’ earnings partially removes the uncertainty that existed before Law No. 7338 was enacted and it provides a simple taxation procedure especially for small earnings, the question marks regarding the nature of the income in question have not been resolved. Even though there is no clear regulation regarding the nature of the income in the text of Law No. 7338, it is stated that these activities are in the nature of commercial activities in the Justification7 of Law No. 7338. It can be understood from the justification that the Legislature accepts the understanding in the rulings given by the Revenue Administration before Law No. 7338. However, it is argued that it is legally more accurate to determine the nature of these earnings as self-employment earnings.8 6 Sağlam. 7 Proposal and justification for the Amendment of the Tax Procedure Law No. 193 and Certain Laws, https://www2.tbmm.gov.tr/d27/2/2-3854.pdf (Access date: 23.01.2022). 8 Ergin.
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