Our Explanations:

Contents of the Article Subject to Cancellation Request

Article 7(1) of the mentioned Law states that the digital service providers that fail to fulfill their obligations of submitting declarations and making payments for taxes under Tax Procedural Law in a timely manner, or their authorized representatives in Türkiye, may be notified to fulfill such obligations by the tax office authorized to collect digital service tax through the notification methods, electronic mail or all other communication tools specified in Law no. 213 by using information from the contact details, domain name and IP address on their website or similar sources, and this situation is announced on the website of Revenue Administration. As stated in Article 7(2) of the Law, if such obligations are not fulfilled within thirty days after the notification, the Ministry of Treasury and Finance decides to block access to the services offered by such digital service providers, such decision is sent to the Information Technologies and Communication Agency to be notified to access providers, and implemented by access providers within twenty-four hours after the notification.

Constitutional Court Decision no. E.2020/11, K.2023/98 dated 18/05/2023

It was asserted that blocking access to the services offered by digital service providers in case of their failure to fulfill their obligations contradicted the principle of equality, that the decision of the Ministry of Treasury and Finance for blocking access to the services offered by digital service providers was a breach of freedom of communication because the justifications listed in the relevant Constitutional article and a duly accepted judicial decision are required to block communication, and that this was an intervention for the freedom of expressing and disseminating thoughts.

The Constitutional Court reached the following conclusions in its evaluations based on Article 48 “Freedom of Work and Contract” of the Constitution, which states that “Everyone has the freedom to work and conclude contracts in the field of his/her choice. Establishment of private enterprises is free. The State shall take measures to ensure that private enterprises operate in accordance with national economic requirements and social objectives and in security and stability.”

• In Terms of Legality and Legitimate Purpose:

The rule that allows blocking access to the services offered by digital service providers restricts their freedom of undertaking. It is understood that the rule is specific, addressable and predictable, and therefore fulfills the principle of legality, considering that the article regulates the reason and method for blocking access to the services offered by digital service providers clearly and without leaving any room for doubt.

• In Terms of Reasonable Means Evaluation:

Instead of conventional tax security precautions, which are understood to         remain incapable to ensure fulfillment of tax obligations of digital service providers that do not have physical permanent workplaces and generally carry out their activities online, it is natural to resort to some precautions on the website where they carry out all activities. However, the purpose that should be protected by law and the legal protection method (means) defined in the law for the achievement of this purpose should be proportional. In this context, if there is a measure that would cause less harm to the rights and freedoms of the individual, it should be sufficient or should be applied first.

Blocking access to the services offered by digital service providers that fail to fulfill their obligations of submitting declarations and making payments under Tax Procedural Law in a timely manner means blocking access to the whole website where digital service providers offer their services, which is the heaviest sanction. It is understood that service providers are overburdened and the reasonable balance between freedom of enterprise and public interest is disturbed by directly deciding on blocking access, although it is possible to impose gradual tax security precautions for websites where digital service providers carry out all activities, starting with mild restrictions -such as advertisement bans, prevention of signing new contracts, gradual narrowing of internet traffic bandwidth, etc.-, resorting to heavier sanctions in case of the failure to fulfill tax obligations despite these restrictions, and in the final stage, blocking access to the whole website where digital service providers offer their services. Therefore, it is concluded that the restriction imposed on the freedom of undertaking is disproportionate and violates the principle of proportionality.

It was decided that the cancellation decision would enter into force 9 months after its publication on the Official Gazette.

The decision was published on the Official Gazette dated 12 September 2023, accessible via the attached link. https://www.resmigazete.gov.tr/eskiler/2023/09/20230912-3.pdf

Regards,