The first regulations related to Transfer Pricing started at USA and with the participation of other developed countries the subject started to cover a broader content. The first phase was finalized in 1995 with the issue of first OECD Transfer Pricing Guideline, which had been worked on since 1970s.
When the calendars showed year 2012, the subject of transfer pricing had been accepted by several parties and in around 70 different countries, including Turkey, these regulations had been applying.
In Turkey, the legislative regulations related to transfer pricing, have started with the change at the 13th Clause of CIT Law No: 5520 and by adoption of respective legal regulations (1st and 2nd General Communiqué on Disguised Profit Distribution Through Transfer, published on 18 November 2007 and 22 April 2008 at official journal and the cabinet decree, dated 6 December 2007, numbered 2007/12888). Also, with the adjustments made on Law No:193 Income Tax Law, additional sanctions are introduced to those that exist in the Corporate Income Tax Law.
Addition to these regulations, Department of Revenue published two guidelines on 01 August 2009 and on 23 November 2010 with the headlines “Guide to the Mutual Agreement Procedure in the Double Taxation Prevention Agreements” and “Guide for Transfer Pricing” respectively.
BEPS, in a longer version Base Erosion and Profit Shifting, is a series of action plans and adjustments related to Transfer Pricing prepared and compiled by OECD countries to sustain a better, much more straightforward and controlled TP implementation and application. Briefly, this action plan sharpens the specialties and classification of the two most important sub headlines of TP, which are base erosion and unjust/covered profit shifting.
As a member of G20 countries Turkey, as it is due by BEPS action plans, accepted the standards within the action plan and started to make the necessary internal adjustments, regulations.
As of March 2016, within the scope of 13th Action, initial legal arrangements have been started and when the No: 3 Draft General Communiqué on Disguised Profit Distribution Through Transfer Pricing come into operation, several international group firms that operates in Turkey or abroad will be strictly obliged to prepare a TP report according to BEPS.
Check out to learn more about the action plans and details related to this subject.
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