The revenue administration of Turkey has issued a draft communiqué on 16^th March 2016 that 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.

Cost Contribution Arrangements: Definition and guidance on cost contribution arrangements (CCAs) has been introduced in Turkey by a new Draft General Communiqué numbered 3 on Disguised Profit Distribution through Transfer Pricing.

CbC reporting requirement: General rule: Revenue administration of Turkey has issued a draft report on 16 March 2016 to 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 (CbC) reporting. Once finalized, it would expand certain legal requirements and would introduce new transfer pricing documentation rules. 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.  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: Information: Companies that are part of a multinational group having an asset value of a minimum of TRY 250 million at the close of the previous fiscal year and 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. The Master file would be comprised of five main categories of information like organization structure, definition of business operations, intellectual property, intra-group financial transactions, and the tax and financial position of all group companies.

Local file: Information: As per the draft report, 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 100 million, would be required to submit a form providing detailed information regarding related parties and related-party transactions.