Transfer pricing in Turkey at a glance
|Regulation Type||National regulations|
|Are there specific transfer pricing regulations?||Yes|
|Submission deadline upon request||15 days|
|Annual update required||Yes|
|Official language requirements||Turkish|
|Potential impact of penalties||N/A|
Turkish tax law
Rules for transfer pricing in Turkey are based upon:
- New Turkish Corporate Tax Code Articles 13
- Income Tax Law Article 41/5
- Transfer Pricing Decree No. 2007/12888
- Transfer Pricing General Communiqué No. 1 and 2
- Transfer Pricing Decree No. 2008/13490
Rules for transfer pricing in Turkey are generally based on their own regulations. Some reference towards the OECD Transfer Pricing Guidelines is made in Turkish Law, however, in practice this is very limited.
Accepted methods are:
- The comparable uncontrolled price method
- the resale price method
- the cost plus method
- the profit split method
- the transactional net margin method
- other unspecified methods.
Priority of methods
Rules for transfer pricing in Turkey prescribe that transactional methods are preferred over the profit based methods.
Information that should be included in the documentation:
In Turkey there is difference in information that should be provided for in a taxpayers documentation, depending on the size of the corporation. ‘Ordinary’ tax payers are only obliged to document their cross border related-party transactions. ‘Large’ taxpayers, however, should also document their domestic related party-transactions.
Rules for transfer pricing in Turkey prescribe that all documentation should be provided for in Turkish.
Requirements to prepare documentation annually
Rules for transfer pricing in Turkey prescribe that documentation is prepared annually. The deadline to prepare documentation is the same as the deadline for submission of the annual corporation tax declaration, which is the 25th day of the fourth month following the end of the fiscal year (April 25 for calendar-year taxpayers).
Submission deadline upon request by tax authorities
Upon request, a taxpayer has 15 days to submit its documentation.
Advance Pricing Agreements
Rules for transfer pricing in Turkey provide for an option to obtain for an Advance Pricing Agreement (APA).
The term for which an APA is agreed upon in Turkey is three years.
Rules for transfer pricing in Turkey do not provide for any specific transfer pricing penalties.