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Tax Recommended For Turkish Internet Gaming

by Lorys Charalambous, Tax-News.com, Cyprus

21 January 2009

A Turkish telecommunications watchdog has forwarded a proposal to the Ministry of Finance to impose a tax on internet gaming. The call comes after the industry doubled in value in the period of 2006-2007.

Turkey already operates strict policies on internet use, with internet gambling already subject to an outright ban. The watchdog, the Telecommunications Directorate (TIB), argues that an increasing number of users are becoming addicted to certain games, and companies within the industry are profiting from this without paying any tax.

Questions over Turkey’s internet gaming industry arose after a MMORPG (massively multiplayer online role-playing game) game, run by K2 Network, was banned from the nation's internet cafés after the game was deemed highly addictive. The Turkish government claims that the California-based company operating the game made profits of around USD1m a month from Turkish users alone during 2007.

The tax, if adopted, is likely to be applied on internet gaming companies rather than the end consumers as the game involves micro transactions and 60% of its users access it from their home addresses.

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