A draft communique provides detailed information relating to the country-by-country reporting and transfer pricing documentation requirements in Turkey.
The public comment period for the draft communique opened 16 April 2020.
The draft communique is intended to implement provisions announced by a presidential decree (No. 2151, February 2020)—read TaxNewsFlash—and generally indicates that Turkey will follow the OECD recommendations in implementing the base erosion and profit shifting (BEPS) Action 13 reporting requirements.
Reporting or documentation requirements
The transfer pricing documentation rules in Turkey focus on three areas:
Turkey has not signed the Multilateral Competent Authority Agreement (MCAA). Accordingly, in the event that Turkey does not have an qualifying agreement that would allow for the automatic exchange of CbC reports by the end of 2020, local (Turkish) subsidiaries of MNE groups may be required to file a CbC report in Turkey.
CbC notification requirement
CbC notification requirements have been introduced, and provide that for qualifying MNEs, the reporting entity—whether the ultimate parent entity or a surrogate entity—will notify the Turkish tax authorities of the identity of the entity that will be responsible for filing the CbC report. This CbC notification is to be made within six months after the effective date (August 2020) of the rule. For subsequent notification periods, CbC notification is to be made by the end of June, in a written filing made with the tax authorities.
The draft communique further states that if more than one company of an MNE group is operating and conducting business in Turkey, then only one of these companies is to make the CbC notification.
The format of a sample CbC notification letter is provided as an annex to the draft communique.
The draft communique provides:
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Turkey:
Başak Diclehan | firstname.lastname@example.org
Read an April 2020 report [PDF 710 KB] prepared by the KPMG member firm in Turkey
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