Turkey: Country-by-country reporting, automatic exchanges under CbC MCAA
Turkey: Country-by-country reporting
Turkey has activated its relationship with 38 countries regarding the automatic exchange of country-by-country (CbC) reports within the framework of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA).
The CbC MCAA was approved and published in Turkey’s official gazette (1 October 2020); thereby, Turkey is considered a signatory of the CbC MCAA as of 30 December 2019.
Accordingly, the automatic exchange of CbC reports will be performed between Competent Authorities of countries that are signatory parties to the CbC MCAA. With the signing and completion of the necessary activation procedures regarding the CbC MCAA, Turkish resident entities that are part of foreign-headquartered multinational enterprises (MNEs) are not required to submit the CbC report to the Turkish tax administration. Rather, MNEs that have their ultimate parent entity (UPE) in Turkey will submit their CbC reports to Turkey and they will not assign any surrogate entities in other jurisdictions covered under CbC MCAA.
Under the CbC MCAA process, tax jurisdictions aim to increase tax transparency in order to assess how multinational businesses structure their activities and to assess high-level transfer pricing risks and other base erosion and profit shifting (BEPS) risks as well as economic and statistical analysis.
While the exchange of information for tax purposes, including automatic exchange of information, will take place between Competent Authorities, bilateral or multilateral exchanges of information may also be mutually agreed.
In addition, there is a CbC reporting notification obligation, requiring taxpayers to submit these CbC notifications to tax authorities by the end of June of each year.
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services practice in Turkey:
Başak Diclehan | firstname.lastname@example.org
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