Entrance
The e-commerce industry is growing day by day with the acceleration of digital transformation. However, in order for e-commerce companies to be successful, they need to get their financial and tax planning right. In this article, we’ll cover tax planning strategies for e-commerce companies.
1. Understanding Tax Legislation
The first step in tax planning for e-commerce companies is to understand the current tax legislation. Companies engaged in e-commerce in Turkey are subject to taxes such as VAT, income tax, and corporate tax. In addition, additional taxes, such as a digital service tax, may apply in some special cases.
2. Using the Right Accounting Software
Another way to succeed in tax planning is to use the right accounting software. Customized software for e-commerce companies automates financial transactions and helps you file taxes on time. These software also facilitate operations such as income-expense tracking, stock management, and invoicing.
3. Benefiting from VAT Refund
E-commerce companies can get VAT refunds on overseas sales. In particular, exporting companies can reduce their costs by getting a VAT refund. VAT refunds cannot be obtained for domestic sales. It is important to prepare the necessary documents completely and correctly in order to receive a VAT refund.
4. Supporting Expenses with Documentation
It’s essential to properly document your expenses in order to take advantage of tax benefits. Document all your expenses such as staff salaries, rental expenses, advertising expenses by invoicing. This helps you lower your tax base and pay less tax.
5. Getting Tax Advice
Tax regulations can be complex and constantly changing. Therefore, seeking professional help from a tax advisor can help you optimize your e-commerce company’s tax planning. Tax consultants ensure that you fulfill your legal obligations while determining your company’s tax strategies.
6. Micro Export and Income Tax Exemption
The Ministry of Finance has exempted half of the income tax for real person income taxpayers who make micro exports through Electronic Commerce Customs Declaration (ETGB) in Turkey. This exemption provides a significant advantage for small-scale exporting individuals and alleviates the tax burden. Micro export usually means that small and medium-sized enterprises sell abroad. ETGB speeds up and facilitates these transactions. In order to benefit from the exception, the following steps must be followed:
- ECCD Application: Enterprises that will make micro exports should apply for ETGB. For this, you can agree with companies that ship abroad that work in harmony with micro exports.
- Preparation of Relevant Documents: Documents required for the exception include sales invoices, export declarations, and payment receipts. It is important that these documents are submitted completely and accurately.
- Income Tax Return: At the end of the year, when filing an income tax return, prepare and submit your return, taking into account this exception.
- Terms: Those with an annual export revenue of up to 400,000 Turkish liras must be self-insured in the relevant year; those who earn up to 800,000 Turkish liras per year are themselves insured, but employ at least 1 insured worker; Those with up to 1,600,000 Turkish liras employ at least 2 insured workers, although they are themselves insured; Those with up to 2,400,000 Turkish liras are required to employ at least 3 insured workers, although they are insured themselves.
7. Exporter Discount
For exporting corporate taxpayers, the government has introduced an exporter discount of 5%. This discount reduces the tax burden of exporting companies and provides an advantage in international competition. This exemption is for corporate taxpayers and applies only to export income; This discount does not apply to all of their income. The exporter discount contributes to the further investment and growth of companies. To take advantage of this discount, the following steps must be followed:
- Annual Return: The exporter’s discount is reported to the tax office together with the annual corporate tax and provisional tax return. At this point, it is of great importance to distinguish between income and expenses in terms of whether they are related to exports or not. When the tax office requests this file from you, you should be able to give a clear explanation.
8. Following Legal Regulations
Companies operating in the e-commerce sector should closely follow the constantly changing legal regulations. Changes in things like tax rates, incentives, and exemptions can have a direct impact on your tax planning. Therefore, it is important to keep up-to-date information and update your strategies as needed.
Result
Tax planning for e-commerce companies is the cornerstone of a sustainable business model. By implementing the strategies mentioned above, you can reduce your tax liabilities and improve your financial efficiency. With the right planning and professional support, you can guarantee the success of your e-commerce company.
