Transfer Pricing
We analyse whether transactions with related parties are at arm's length and fulfil your documentation obligations in full.
Transfer pricing rules were introduced to prevent companies from engaging in unfair tax competition internationally and to prevent the erosion of the tax base in the purchase and sale of goods and services between group companies. In parallel with the growth of international trade, the subject has become one of the priority agenda items for tax administrations and taxpayers alike.
Under the arm’s length principle, the prices group companies apply in transactions with one another must be in line with the prices unrelated companies apply in the same transactions.
Under the rules in force in Türkiye, companies must, within defined thresholds, prepare a Master File, a Country-by-Country Report (CbCR) and an Annual Transfer Pricing Report (Local File), fulfil their CbCR notification obligations and complete the relevant form annexed to the corporate income tax return.
Scope of Our Service
- Preparation of the annual transfer pricing report (Local File)
- Preparation of the Country-by-Country Report (CbCR) for multinational enterprises
- Support in fulfilling the CbCR notification obligation
- Preparation of the Master File
- Assessment of existing practices and contracts under the transfer pricing rules
- Establishing a compliant structure in restructurings and new incorporations
- Management of the Advance Pricing Agreement process
- Support services for the form annexed to the corporate income tax return
- Advisory during transfer pricing audits
Frequently Asked Questions
It is mandatory for corporate income taxpayers that exceed the defined thresholds and transact with related parties. The scope is broader for taxpayers registered with the Large Taxpayers Tax Office.
These additional documentation obligations arise where multinational groups exceed certain consolidated turnover thresholds. The thresholds and deadlines should be checked every year.
A method appropriate to the nature of the transaction is selected (comparable uncontrolled price, cost plus, resale price, transactional net margin or profit split) and the arm's length range is determined through a database study.
Where taxpayers meet the documentation obligation fully and on time, the tax loss penalty is applied at a reduced rate even if disguised profit distribution is identified. Failing to document removes this protection.
It is preferred for high-volume, recurring transactions because it provides tax certainty. For the duration of the agreement, the risk of challenge on the relevant transactions is largely eliminated.