TAX NEWS NO: 2016/9

August 26, 2016

Recent Changes in Turkish Transfer Pricing Landscape.

A number of significant changes have been made in Article 13 of the Turkish Corporate Tax Law governing “disguised profit distribution through transfer pricing”, which have come into effect on August 9th, 2016. The multifaceted changes will have important consequences on the Turkish transfer pricing landscape. The most important aspects of the changes introduced can be concisely summarized as follows:

  • Threshold on relatedness: According to the changes introduced, in cases in which relatedness arises through direct or indirect ownership there must exist at least 10% ownership, voting rights, or dividend rights for a consideration of disguised income distribution. The Council of Ministers is authorized to modify this ratio from 1% to 25% or completely remove this condition, in the future.

  • Explicit Recognition of Transactional Profit Methods: Transactional profit methods (transactional net margin method and profits split) were already in use in Turkish transfer pricing practice per guidance provided by General Communiqué No:1 on transfer pricing. With the most recent changes introduced; the use of such methods, in addition to transactional methods, are explicitly added to Article 13 of the Corporate Tax Law governing “disguised profit distribution through transfer pricing”.

  • On Advance Pricing Agreements (“APAs”): The method determined under the original agreement may be applied to past open fiscal years provided that the regret filing clauses of the tax procedural law are applicable to the case, and that the conditions under which the APA was signed are also applicable to the past years. In addition, the Council of Ministers is authorized to modify the term limit for APAs from 3 years to 5 years in the future. The current limit is 3 years per existing regulations.

  • (Partial) Penalty Protection: Provided that transfer pricing documentation requirements are met in full and on time, the penalty on under paid or late paid tax due to disguised profit distribution will be imposed with a 50% reduction, except in cases where the underpayment arises from acts described in Article 359 of the tax procedural law (pertaining to tax evasion provisions).

  • Procedures for Mutual Exchange of Information: With the recent changes in effect from August 9th, the authority of the Council of Ministers has been extended. Accordingly, the Council of Ministers has been authorized to include the obligation of providing of information about the operations of cross-border related parties outside Turkey within the scope of transfer pricing documentation obligations and also to determine the procedures for mutual exchange of such information with the Tax Administrations of other countries in accordance with the international agreements.


Dr. Özgür Toros (İstanbul)

Deloitte Turkey, Partner


G. Hülya Yılmaz (İstanbul)
Deloitte Turkey, Partner


Gressi Benveniste (İstanbul)

Deloitte Turkey, Director


Yours sincerely,

Deloitte Turkey

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

These materials and the information contained herein are provided by Deloitte Turkey and are-intended to provide general information on a particular subject or subjects and are not on exhaustive treatment of such subject(s).

Accordingly, the information in these materials is not intended to constitute accounting, tax, investment, consulting, or other professional advice or services. The information is not intended to be relied upon as the sole basis for any decision which may affect your personal finances or business, you consult a qualified professional adviser.

These materials and the information contained therein are provided as is, and Deloitte Turkey makes no express or implied representations or warranties regarding these materials or the information contained therein. Without limiting the foregoing, Deloitte Turkey does not warrant that the materials or information contained therein will be error-free or will meet any particular criteria of performance or quality.

Deloitte Turkey expressly disclaims all implied warranties, including, without limitation, warranties of merchantability, title, fitness for a particular purpose, non-infringement, compatibility, security and accuracy.

Your use of these materials and information contained therein is at your own risk, and you assume full responsibility and risk off loss resulting from the use thereof. Deloitte Turkey will not be liable for any special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in an action of contract, statue, tort (including, without limitation, negligence), or otherwise, relating to the use of these materials or the information contained therein.

© 2016 Deloitte Global Services Limited