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On the other side, it is also worth remembering that the Therefore, while employees who want to continue to be taxed
presidential election in the US in the last quarter of 2020 from their previous tranche by transferring their tax base,
may delay the schedule for resolution on digital taxation until new employers will calculate income tax again for employees
2021. who do not want this, starting with the lowest tax tranche.
Employees' preferences for reporting or not notifying their
Is the transformation of Turkey's digital economy taxation a employers to new employers do not affect their liability for
requirement? Yes, a transformation is essential in Turkey’s submitting annual tax returns. In other words, employees
taxation policy on the digital economy. Because, Turkey is who transfer the tax base may also have to submit an annual
implementing a dual digital company taxation if VAT is set return if their wage income exceeds the specified limit.
aside. The first of these is the withholding applied on internet
advertising service payments made abroad within the For the employees earning wage income from more than
scope of tax liability and the second is the digital service tax one employer in a calendar year, to make tax assessments,
implementation introduced through the Law no.7194. it would be beneficial to do these evaluations when the
possibility of obtaining income from more than one employer
emerges, without waiting for the period that the tax return
Changes for those receiving will be submitted in order to make the right decision
regarding the transfer of the tax base and to prevent possible
wage income from multiple sanctions by fulfilling their declaration obligations on time.
employers

Evaluations on recent
Certain updates to the taxation of wages have been
introduced through the arrangement made in late 2019. amendments to the Law
Those earning wage income from more than one employer in No: 4054 on Protection of
a calendar year are also affected by the latest amendments.
Additionally, the Communique published in May includes Competition
explanations on this matter. The term "multiple employers"
refers to employees who earn wage income from two or more The Law No. 7246 ("Law No. 7246") regarding an
employers in a calendar year. Those who change jobs during amendment to the Law No. 4054 on Protection of
the year, employees working for two or more employers at Competition ("Competition Act") has finally been
the same time and members of the management board in a approved by the Grand National Assembly of Turkey and
different company while working for a company are examples entered into force within Official Gazette dated 24 June
that will be evaluated in this context. 2020. Competition Act has been in force without any
significant amendments since 1994. Recent amendments
Employees are taxed through withholding in Turkey generally bring changes, as well as introduce new instruments for
and mostly they do not submit annual income tax return. competition enforcement.
However, employees earning wage income from more than
one employer may need to submit an annual return in some Hereby, it is aimed to refer to the most prominent changes
cases. Previously, these employees were required to declare introduced by this proposal and make an assessment in this
their wages with an annual tax return if the amount they regard.
found when they added their income from their employers
during the year by excluding one of their own choice exceeds • Amendments to the merger and acquisition
the amount in the second tranche of the income tax tariff transactions
(49.000 TL for 2020).
Within the amendments, the test applicable to review of the
There is no change in this, but in accordance with the new mergers and acquisitions is changed. Before the Law No.
rule introduced by the latest regulation, if the total income 7246, the Turkish Competition Board (“Board”) evaluated
from all employers during the year exceeds the amount in whether mergers create or strengthen dominance of an
the last tranche of the income tax tariff, (600.000 TL for entity with “dominant position test”. Within aforementioned
the year 2020), they should be declared with an annual tax amendments, Board will use “significant impediment of
return. Therefore, workers now have to check if they meet effective competition” test in order to assess whether a
both criteria. transaction creates or strengthens a dominant position or
not. Purpose of this change is to allow a more definite and
Another change is whether the employees who left their jobs reliable assessment for the situations emerged from such
during the year and started working for a different employer transactions and to prohibit transactions that may cause
will be informed of their new employers about the cumulative a significant impediment of competition along with the
income tax bases from the previous employer. In the previous transactions creating or strengthening dominance.
income tax communique, it was indicated that in case of job
change, the new employer should calculate the employee's • De minimis principle
cumulative income tax base without associating it with the
previous employer. However, with the new communique, Introduction of the “de minimis” principle (insignificant
employees who want to do so are free to inform the new restriction of competition) is one of the most important
employer about the cumulative income tax bases that occur changes in the Law No.7246. De minimis principle will be
in their previous employers. applied in preliminary investigation procedures and pursuant
to amendments to the Article 41, Board will be able not

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