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05.12.2017

Incentives For M2M Communications

Article 98 of the Law on the Amendment of Some Taxation Laws and Other Laws (the "Law")1 dated 5 December 2017 and numbered 7061, provides for an amendment of Article 46 of the Electronic Communications Law ("ECL") regulating "radio terminal and equipment fees"2. The amended provision envisages an exemption from licence and usage fees concerning machine-to-machine ("M2M") subscriptions3.

Given concerns arising in connection with the use of foreign operators' SIMs in M2M applications, particularly with the international flow of personal data, the Law aims to promote subscriptions with operators authorised by the Information Technologies and Communications Authority ("ICTA") within the Turkish jurisdiction, as well as generating economic benefits through the facilitation of financial obligations in the M2M communications market.

In addition to the special communications tax exemption concerning M2M communications, ensured by the Law numbered 63224, establishing a licence exempt operation structure for equipment containing M2M communications model will most likely have further benefits in the connectivity of such equipment to communications networks, as well as for the subscribers concerned with the utilisation of number portability.

The amendment will entail significant consequences that are yet to be fully known for both M2M service providers and manufacturers of IoT devices.

Footnotes

1. Published in the Official Gazette No. 30261, dated 5 December2017.

2. As per Article 46(1), such fees and charges for technical examination and similar services shall be registered as revenue to the ICTA. As considered under Article 46(3), authorised operators are obliged to collect radio licences and annual usage fees from subscribers, on behalf of the ICTA and transfer such charges to the account of the ICTA. Under Article 46(5), radio licences and annual usage fees collected from billed subscribers shall be received on the basis of dividing fee amounts into equivalent instalments starting the month when subscription took place until the end of the year.

3. Upon the publication of the Amendment the following sentence shall be added to the scope of Article 46(2): "In addition, radio equipment and subscriptions which are outside the scope of radio equipment and subscriptions that pertain to machine-to-machine data transfers for the remote tracking, performing business, and services by a central server and are necessary for the conduct of such operations, and are not used for the purpose of audio visual communication or general internet access, shall be exempt from the radio licence and annual usage fees. The Authority is authorised to determine the procedures and principles applicable to the exemption practice."

4. Published in the Official Gazette No. 28324, dated 31 May 2012; Article 3 of the Law numbered 6322 amends the Article 39(3) of the Law numbered 6802 providing for an exemption from the special communication tax for initial mobile communication subscriptions that pertain to machine-to-machine data transfers for the remote tracking, performing business, and services by a central server and are necessary for the conduct of such operations.