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Foreign tourism agencies profit in Türkiye without tax obligations

Foreign tourism agencies profit in Türkiye without tax obligations A woman browses the San Francisco-based Airbnb application (Bloomberg Photo)
By Newsroom
Jun 25, 2024 9:19 AM

Foreign tourism agencies operating without offices in Türkiye, but with headquarters abroad, are reaping billions of Turkish liras in revenue from the country without paying any corporate or income taxes.

Local companies and industry associations have lodged complaints with the ministry demanding “fair competition under equal conditions” against major foreign firms like San Francisco-based Airbnb, Tripadvisor, Agoda (under Booking Holdings) and Expedia (Trivago).

Local companies demand tax equality

Turkish firms and sector associations have repeatedly raised concerns to the relevant ministry, arguing that foreign companies earning similar profits in the sector should be subject to taxes like themselves to maintain fair competition.

Despite these appeals, concrete steps have yet to be taken. Local companies assert that the unequal tax treatment puts them at a disadvantage in pricing, emphasizing the need for equalization in the industry’s conditions.

Global tourism titans’ lucrative Turkish market

The sales and revenue figures of global tourism giants are staggering. Airbnb alone reported revenue exceeding 3 billion euros last year from worldwide sales, with over 120 million stays booked. The company is valued at around 30 billion euros.

Agoda, another player in the sector, operates under Booking Holdings, which ceased operations in Türkiye in 2017.

Tripadvisor, headquartered in Massachusetts, U.S., and Trivago, owned by Expedia, is also known for substantial sales and revenue figures, particularly in Türkiye, one of their strongest markets.

The market share these companies command through online tourism sales channels in Türkiye is steadily increasing.

Reactions to recent tax measures

Recently, tax regulations were introduced specifically targeting Airbnb revenues earned through such rental transactions. It was announced that taxes would be collected from individuals renting rooms through Airbnb. However, this regulation did not extend to the top-tier corporations in the sector.

Steps were taken regarding the taxation of the mentioned companies in 2018-2019; industry associations even filed lawsuits. However, the status of these processes remains unclear. The tax applied to Airbnb was misunderstood by the public. It targets those earning income through this channel, not the global intermediary,” Industry insiders clarified.

Last Updated:  Jun 25, 2024 12:11 PM