Customer Success Managers in Turkey: Tax and Permanent Establishment Risk for US Companies
Engineers in Turkey rarely create a permanent establishment. Customer-facing people are different: a customer success manager, account manager or renewals specialist serving Turkish accounts can make a US company taxable in Turkey — depending on authority, not title.
The short version
A customer success manager (CSM) in Turkey creates a permanent establishment for a US company when they habitually conclude contracts in substance — negotiating renewals, agreeing discounts or sending order forms headquarters signs without change. Adoption, onboarding and account-health work alone is lower risk. A full-time home office serving Turkish customers adds a second, fixed-place risk under the OECD’s 2025 home-office guidance.
Key facts
| Point | Position (October 2026) | Basis |
|---|---|---|
| Treaty agent-PE test (US–Turkey) | Dependent agent who has and habitually exercises authority to conclude contracts on behalf of the enterprise | US–Turkey Income Tax Treaty Art. 5(4) |
| Does the US–Turkey treaty use the post-BEPS “principal role” wording? | No — the US is not a party to the OECD Multilateral Instrument, so the pre-2017 wording applies | Treaty text; MLI party list |
| Turkish domestic agent test | Permanent representative: a person working continuously in Turkey on behalf of and for the account of a business — no signing authority needed | Tax Procedure Law Art. 157; Corporate Tax Law Art. 3 |
| Fixed-place test for a home office | <50% of working time at home over 12 months → generally not a place of business; above that, serving local customers is a commercial reason | OECD Commentary 2025 Update |
| Services PE in the US treaty | None | Treaty Art. 5 |
| Tax if a PE exists | 25% corporate tax on attributable profit, plus filing and bookkeeping | Corporate Tax Law Art. 32 |
| VAT on the CSM’s contractor invoice | Usually 20% — benefit of Turkish-account work is used in Turkey | VAT Law Art. 11/1-a, 12/2 |
Does a customer success manager in Turkey create a PE for a US company?
Account-health role vs revenue role: the task-by-task test
| CSM task | Agent-PE risk | Why |
|---|---|---|
| Onboarding, training, adoption reviews | Low | Service delivery, no contracting |
| Health scores, QBRs, escalation to support | Low | Relationship management |
| Identifying expansion opportunities and passing to US sales | Low–medium | Lead generation only, if hand-off is real |
| Owning a renewal or net-revenue-retention target | Medium | Incentive aligns the role with selling |
| Negotiating renewal price, term or discount | High | Material terms agreed in Turkey |
| Sending order forms that HQ signs without change | High | Habitual conclusion in substance |
| Signing, accepting POs or e-signing renewals | Very high | Authority to conclude contracts exercised in Turkey |
The treaty wording — “has and habitually exercises an authority to conclude contracts” — was written before e-signature. Tax authorities and courts read it by substance: if every material term is agreed in Turkey and the US signature is a formality, the authority is being exercised in Turkey. The domestic permanent-representative test in Tax Procedure Law Art. 157 is wider and is where a Turkish audit starts.
Fixed place vs dependent agent: two separate risks for one person
A CSM can trigger a PE in two independent ways, and fixing one does not fix the other.
For engineers the fixed-place question is usually answered by “no commercial reason to be in Turkey”. For a CSM serving Turkish accounts that answer is not available, which is why customer-facing roles need a different design from engineering roles. Compare Does hiring a developer in Turkey create a PE?
Eight controls that keep a CSM role on the right side of the line
- Written approval matrix: pricing, discounts and non-standard terms approved by a US deal desk or sales leader, with evidence in the CRM.
- Contract routing: renewals generated and sent for signature from the US; the CSM is not a signatory or sender in the e-sign tool.
- Real review at HQ: HQ changes, rejects or re-prices renewals in practice — a rubber stamp does not help.
- Role description and title: “Customer Success Manager” with adoption and retention scope, not “Turkey Country Manager” or “Head of Sales Turkey”.
- Compensation: avoid commission on Turkish bookings; health and retention metrics are safer than revenue targets.
- Customer communications: email templates and signatures do not present the CSM as authorised to commit the company.
- Working pattern: no customer meetings at home; no company-paid office in Turkey without a PE analysis first.
- Annual re-check: roles drift — the CSM who started on onboarding is often running renewals two years later.
How the US–Turkey treaty compares with other Turkish treaties
| Treaty position | Agent-PE wording | Services PE | Effect for a CSM |
|---|---|---|---|
| US–Turkey | Habitually exercises authority to conclude contracts (pre-BEPS) | None | Focus on who agrees terms and who signs |
| Treaties with a services-PE clause (e.g. New Zealand–Turkey) | Similar agent wording | Services furnished through individuals present >183 days in a 12-month period (with conditions) | Time in Turkey alone can matter |
| Treaties modified by the MLI, where both states opted for the Art. 12 agent rule | Also covers a person who plays the principal role leading to contracts routinely concluded without material modification | Treaty-specific | Negotiating renewals is caught even if HQ signs |
| No treaty | Turkish domestic law only (Tax Procedure Law Art. 157) | — | Widest exposure |
UK, German and other European employers should check their own treaty and its MLI status; the analysis above is for US companies.
Personal tax and VAT: the two questions that follow the PE question
The CSM’s own tax position depends on the engagement. A remote employee on US payroll is taxed in Turkey on salary for work performed in Turkey, and a foreign employer without a Turkish workplace cannot register with SGK — see Remote employee in Turkey: tax, payroll, SGK & PE risk. A CSM engaged as a contractor serving Turkish accounts should normally charge 20% VAT, because the benefit of the work is used in Turkey — see Should a Turkish contractor charge VAT to a US company?
Anonymised case analyses
Facts. Series B US SaaS company, 35 Turkish accounts, one Istanbul CSM engaged via EOR, compensated partly on net revenue retention. She negotiated renewal discounts on calls and sent order forms the US CRO signed without edits.
The obvious answer. “She is employed by the EOR and does not sign — no PE.”
Why it failed. The EOR changed the employer, not the activity. Material terms were agreed in Turkey, habitually, and the US signature was a formality. Her NRR bonus confirmed a revenue role.
Structure adopted. US deal desk approval for all pricing changes with CRM evidence; renewals generated and sent from the US; NRR bonus replaced with adoption and health metrics; title kept as CSM; a Turkish subsidiary with a service agreement planned before the second Turkish hire.
Facts. US company selling to Turkish hospitals; CSM in Ankara did onboarding and training only; all commercial contact sat with a US account executive who travelled twice a year.
The obvious answer. “Customer-facing, so there must be a PE.”
Why it failed. It did not — the analysis held up. No contracting authority, no pricing role, clear CRM ownership by the US AE. The residual fixed-place question (full-time home office, local customer contact) was managed by a co-working arrangement held by the EOR and documented working patterns.
Structure adopted. Kept the EOR model; added an annual role review and a written policy that the CSM does not discuss price. VAT and payroll were handled correctly through the EOR.
What happens if…
What happens if the Turkish tax office decides our CSM is a dependent agent?
Your company is treated as having a Turkish permanent establishment. Profit attributable to it is assessed to 25% corporate tax for open years, with a tax loss penalty and late-payment interest, and the company must register, keep books and file in Turkey going forward.
What happens if the CSM’s role changed over time?
The assessment follows the facts year by year. A role that was clean in the first year can create exposure from the year the authority moved — which is why the CRM and e-sign trail matter.
What happens if we hire a second and third person in Turkey?
Each customer-facing hire increases both the fixed-place and the agent risk, and non-recoverable VAT on contractor or EOR invoices adds up. Around this point a Turkish subsidiary with a cost-plus service agreement usually becomes the more efficient structure.
What happens in due diligence?
Investors and acquirers ask about every country where people work. An undocumented customer-facing role in Turkey is a standard indemnity item; a written CPA opinion and clean controls usually resolve it.
What drives the cost of a review
Fees are confirmed privately. Scope depends on the number of customer-facing people in Turkey, the treaty country, how much CRM and e-sign evidence must be reviewed, how many past years are open, and whether the review includes VAT on contractor or EOR invoices and a structure recommendation.
Frequently asked questions
Does a customer success manager in Turkey create a permanent establishment for a US company?
Not by default. A CSM limited to onboarding, adoption and account health does not conclude contracts. Risk arises when the CSM negotiates renewals, agrees discounts or sends contracts headquarters signs unchanged, or works full-time from a home office serving Turkish customers.
Is a renewal negotiated in Turkey but signed in the US a PE risk?
Yes. If the material terms are agreed in Turkey and the US signature is a formality, authority to conclude contracts is being exercised in Turkey in substance. Turkish domestic law on permanent representatives (Tax Procedure Law Art. 157) does not even require signing authority.
Does using an employer of record protect against PE risk for a CSM?
No. An EOR becomes the legal employer and handles payroll and social security, but the CSM still acts for your company. The PE analysis depends on what the CSM does, not on who employs them.
Does the US–Turkey tax treaty have a services PE clause?
No. The US–Turkey treaty’s PE tests are a fixed place of business, a dependent agent who habitually exercises authority to conclude contracts, and construction projects over six months. The US is not a party to the OECD Multilateral Instrument, so the pre-2017 agent wording applies.
Can a home office in Turkey be a PE for a customer-facing role?
It can. Under the OECD 2025 Commentary, a home used for at least half of working time over 12 months may be a place of business if there is a commercial reason for the presence — and serving local customers is the example given.
Should a CSM be paid commission on Turkish revenue?
Commission on Turkish bookings strengthens the argument that the CSM sells for the company in Turkey. Adoption, retention and health metrics are safer incentives for a role meant to stay outside contracting authority.
When should a US company open a Turkish subsidiary for customer-facing staff?
Usually when Turkish staff negotiate or sell, when there are several customer-facing people, or when non-recoverable VAT on contractor or EOR invoices becomes material. A subsidiary with a service agreement contains the exposure inside a Turkish taxpayer.
Is your Turkey-based customer success or account team creating a permanent establishment?
We help foreign companies assess Turkish VAT treatment, permanent establishment exposure and contractor arrangements through a CPA-led written tax opinion and a practical compliance roadmap — Tax Certainty before the tax office asks.
To scope the review, send us five facts: country of incorporation · number of customers in Turkey · what the Turkey-based people do day to day · the current contract model · whether anyone in Turkey negotiates price or renewals.
Request a Turkey Tax Risk Review →WhatsApp a CPA+90 216 352 29 61
The full service — VAT, permanent establishment and contractor status for foreign companies serving Turkish customers — is described on Foreign Companies Serving Turkish Customers: VAT, PE & Contractor Risk.
Related reading
- Should a Turkish contractor charge VAT to a US company?
- Permanent establishment & corporate tax residency risk in Turkey
- Employer of record vs own entity in Turkey
- Turkey Remote Workforce & PE Risk Review
Primary sources
- VAT Law No. 3065 — Art. 1, 9, 11/1-a, 12/2, 28
- GİB — VAT General Implementation Communiqué, section II.A.2 (service export) and published rulings (özelge)
- Tax Procedure Law No. 213 — Art. 156, 157, 344
- Corporate Tax Law No. 5520 — Art. 3, 30, 32
- Income Tax Law No. 193 — Art. 89/13
- Labour Law No. 4857 — Art. 8 · Social Security Law No. 5510
- Official Gazette (Resmî Gazete) — treaty texts and Presidential Decisions
- OECD Model Tax Convention 2025 Update (19 Nov 2025) — home-office PE guidance, summary
General information on Turkish law as of October 2026, not a tax opinion on your facts.
Turn Turkey compliance into certainty
SYSTEMS CPA supports foreign-owned companies with company formation, accounting, tax compliance and payroll in Turkey — one accountable local partner. Reviewed by Evren Özmen, SMMM (Certified Public Accountant), TÜRMOB Reg. No. 35675.
