Turkey's revenue administration on 16 March 2016 issued a draft communiqué that, once finalized, would expand certain legal requirements and would introduce new transfer pricing documentation rules that generally follow the base erosion and profit shifting (BEPS) Action 13 recommendations and provide for country-by-country reporting.

The draft communiqué introduces new definitions and determinants for the concept and scope of treasury loss. Public comments on the new draft communiqué are due within a 15-day period.

Draft communiqué

The March 2016 draft communiqué—referred to in English as "General Communiqué on Disguised Profit Distribution through Transfer Pricing Serial No: 3"—proposes changes and amendments to earlier guidance—"General Communiqué on Disguised Profit Distribution through Transfer Pricing Serial No: 1"—that has regulated Turkey's transfer pricing rules effective since 1 January 2007.

The draft communiqué:

  • Includes new requirements that would enlarge current legal requirements
  • Introduces additional transfer pricing documentation requirements in line with BEPS Action 13
  • Contains instructions for additional documentation requirements for multinational enterprises—including country-by-countryreporting, and Master file and Local file reporting


Country-by-country (CbC) reporting: "Ultimate" parent companies that are tax residents of Turkey and having a minimum consolidated turnover of TRY 2.37 billion (€750 million) would be required to prepare and provide a CbC report. The taxpayer group would have tonotify to the Turkish tax authorities by 31 December 2016, as to which group company would be the company filing the CbC report. If the fiscal year of the group begins on 1 January 2016, the corporate group would need to file the CbC report by 31 December 2017.

Master file: Companies that are part of a multinational group having (1) an asset value of a minimum of TRY 250 million at the close of the previous fiscal year and (2) a turnover of TRY 250 million or more, would be required to prepare the "Master file" by the end of the second month following the due date for filing of the corporate income tax return. These companies would be required to provide the Master file to the tax authorities in the case of a query.

The Master file would be comprised of five main categories of information—organization structure, definition of business operations, intellectual property, intra-group financial transactions, and the tax and financial position of all group companies.

Local file: All group entities that are tax residents in Turkey would be required to prepare and provide the Local file for transactions exceeding TRY 30,000. However, companies with a minimum asset value at the end of previous fiscal year and turnover of TRY 100million, would be required to submit a form providing detailed information regarding related parties and related-party transactions.

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