September 18, 2022

The application of transfer pricing is applicable to all Turkish real people and institutions that are both full and limited taxpayers. Within the framework of disguised profit distribution through transfer pricing, the purchases or sales of goods or services made by these real people and entities with connected parties in regard to their domestic and international activities will be assessed.

According to the Corporate Tax Law, profits will be regarded to have been implicitly divided through transfer pricing, in whole or in part, if corporations buy or sell products or services from related parties at the price or at a price that is decided in breach of the arm’s length principle.

The term “organization” includes capital companies, cooperatives, public economic institutions, associations or foundations and their economic enterprises and business partnerships.

In terms of the Income Tax Law, if the undertaking purchases or sells goods or services with related parties at the price or prices determined in violation of the arm’s length principle, differences between the arm’s length price or prices and the price or price applied by the owner of the enterprise, to the detriment of the enterprise, shall be deemed withdrawn from the enterprise.

In the application of the Income Tax Law, the term “entrepreneur” includes real persons and partners of ordinary partnerships subject to income tax in terms of commercial and agricultural income, partners of collective companies, limited partnerships of ordinary and limited partnership companies.


Source: Revenue Administration of Republic of Türkiye
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