On 26 October 2021, Turkey has published Law No. 7338 on Certain Amendments on Tax Procedural Law and Certain Laws in the Official Gazette which clarifies provisions with respect to the domestic application of the mutual agreement procedure (MAP).

The Law has introduced a new section entitled ‘Mutual Agreement Procedure’ in the Tax Procedural Law No. 213. The main provisions introduced in the section are:

• Taxpayers may apply to the Revenue Administration in accordance with the provisions of the MAP, claiming that they are taxed in violation of the provisions of a duly enacted double taxation agreement or that there are strong indications that they will be taxed in this way. Subject to the provisions of the double taxation agreement (DTA), this application may also be made through the competent authorities of the other Contracting State party to the agreement;
• The MAP application should be made in due time and in line with the procedure that is specified in the double taxation agreements. If there is no time limit in the DTA or reference is made to the provisions of the domestic legislation, then the application must be made within three years starting from the moment the taxpayer is informed of the taxation subject to the MAP;
• If the Turkish Revenue Administration and the competent authority of the other contracting state come to an agreement during the MAP, the agreement will be notified to the taxpayer by letter. The taxpayer will notify the Turkish Revenue Administration of the acceptance of the decision within thirty days from the date of notification of the letter.
• The taxes and penalties subject to the agreements will be adjusted in the case of the taxpayer’s acceptance of the agreement result in due time;
• The courts will wait for the conclusion of the MAP if there is a MAP underway. The tax administration will inform the conclusion of the MAP to the courts and the courts will continue to the judicial process if no agreement is achieved;
• The MAP application made to the Revenue Administration suspends the statute of limitations written in this Law, as of the date of application, for the taxes and penalties subject to the application. In the event that the result of the agreement is not accepted or deemed not accepted by the taxpayer, the pending statute of limitations continues to run from the day following the date of occurrence of these situations.

This Law entered into force on the date of its publication in order to be applied to the applications to be made as of 1 January 2022.