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Turkey starts imposing VAT on Facebook ads

This photograph taken on May 16, 2018, shows figurines standing in front of the logo of social network Facebook on a cracked screen of a smartphone in Paris. / AFP PHOTO / JOEL SAGET

The Turkish government has begun imposing Value Added Tax (VAT) on Facebook ads, the Bloomberg HT news website reported on Monday.

The practice entered into force as of April 1 as part of a presidential decree that stipulated taxation of online ads.

The social media company is estimated to have generated nearly TL 2.5 billion ($440 million) in revenue in Turkey in the last year, a figure that increases annually.

Facebook Ireland, Ltd., conducts its operations in Turkey as a non-resident company and is therefore exempt from taxation; thus, the tax will be collected not from the company but from the advertisers.

The VAT will be added to the regular advertising fees charged by Facebook, thus increasing the cost of online ads in Turkey, the report said.

According to January 2019 figures, Turkey has some 43 million Facebook users and 38 million on Instagram.

Facebook announced in late November that nearly 2 million small and medium-sized enterprises have commercial accounts.

The company has asked its Turkey-based advertisers to include their VAT number on their accounts and commit to declaring the taxable expenditures to the government.

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