TRANSFER PRICING
OVERVIEW OF THE
TP REGULATIONS
IN TURKEY
ANKARA, 07 March 2012
Ayben ÜNEL
1
Turkish Regulations
January 2007
(with respect to OECD Guidelines)
Article 13 of the CITL No. 5520
November 2007
General Communiqué No.1
December 2007
Cabinet Decision
April 2008
General Communiqué No.2
April 2008
Cabinet Decision
April 2008
November 2010
Circular
TP Guidelines
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Contents
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scope of taxpayers
comprehensive definition of related parties
definition of arm’s-length principle
comparability analysis
definition of arm’s-length range
methodologies
APA
documentation requirements
penalties
adjustments
intangibles
intra group services
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Scope & Applicability
Scope :

all resident and non-resident corporate taxpayers

all resident and non-resident individual taxpayers

both domestic and cross-border transactions
Conditions for determination of disguised income profit
via transfer pricing:

purchase or sale of a good or service

made with related parties

contrary to ALP
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Definition of Scope of Transactions
Sale or purchase of goods and services include :
 purchases
 sales
 manufacturing and construction
 leasing and renting
 borrowing and lending
 distribution of bonus, salary, or similar items
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Definition of Related Parties - Article 13(2)
The following ones can be given as an example :
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shareholders of the corporation
individuals or legal entities related to the corporation or its shareholders
individuals or legal entities which control the corporation directly or
indirectly in terms of management, supervision or capital
individuals or legal entities which are controlled by the corporation
directly or indirectly in terms of management, supervision or capital
other relatives (including third-degree)
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Arm’s Length Principle - Article 13(3)

in determining arm’s length price
internal
comparable
external
comparable

comparability analysis
I.
II.
III.
IV.
characteristics of goods or services;
functional analysis
economic conditions
business strategies
* When comparing the items, “contractual terms” should be
taken into account as well
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Transfer Pricing Methods
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-
Article 13(4)
CUP
C+
RPM
Other methods
a) PSM
profit-based methods
b) TNMM
c) Method determined by the taxpayer
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Documentation Requirements
3 types of documentation requirements :

Annual Transfer Pricing Report

Transfer Pricing, CFC and Thin Capitalisation Form

Annual APA Report
Deadline to prepare documentation :
TP documentation report and supporting documents must be prepared and available
when the corporate income tax return is submitted following the end of the fiscal
Deadline to submit documentation :
submission of the TP documentation is required on request
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Advance Pricing Agreements - 1



corporate taxpayers
applicable for up to 3 years
types of APAs
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unilateral ( first APA was signed in July,2011)
bilateral
multilateral
renewing / revising / revoking
annual APA report
application fees (for the year 2012)


38.147,30 Turkish Lira (app. 16.580 €) for each new APA
30.517,75 Turkish Lira (app. 13.260 €) for each renewal.
non-refundable
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Advance Pricing Agreements - 2
APA Application Process
Written Application
Pre-review of application
(If it is needed)
Additional information
and/or
Interview with the taxpayer
Analysis
Rejection
Signing of a formal APA
(max. 3 years)
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Penalties


no specific TP penalties,
general rules regulating tax penalties under Tax
Procedure Law No. 213 will be applied.
if transfer prices
are not
arm’s length
if documentation
requirements
are not fulfilled
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Thank you
aunel@gelirler.gov.tr
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