Ülke Bazlı Raporlama Kapsamına Giren Firmaların Ağustos Ayı Bildirim Yükümlülüğü (İngilizce Açıklamalar)

  Sirküler No: 2020 / 177

Tarih: 19.08.2020

As it is known,  Presidential Decree No.2151 was published in the Official Gazette dated 25.02.2020 and numbered 30971. According to the Presidential Decree, Turkey adopts the transfer pricing documentation standards under the OECD's Base Erosion and Profit Shifting (BEPS) Action 13 recommendations. The abovementioned Decree is based on three reports. The reports are as follows;

 

• Master File
• Annual Transfer Pricing Report (Local File)
• Country by Country Reporting (CbCR)

 

Information about the reports documentation which shall be prepared by the taxpayers are summarized below;

 

1.     Master File

Turkish corporate income taxpayers that are members of a multinational group with assets and net revenues of TL 500 million or more in the previous year will be required to prepare a master file for the fiscal year in 2019 and for the following fiscal years. 

The master file must be prepared by the end of the next fiscal year following the current fiscal year. A taxpayer with a calendar year end must prepare the master file pertaining to the 2019 fiscal year by December 31st, 2020. 

Companies with special accounting period shall prepare the first Master File for the accounting period that starts after January 1st, 2019. A corporate taxpayer with special accounting period starting on 1 April 2019 and ending on 31 March 2020 shall be required to prepare the first master file for this special accounting period ending on 31 March 2020 until 31 March 2021.

On the other hand, the master file should be kept and submitted to the authorities in case that an official request.

2.     Annual Transfer Pricing Report (Local File)

The obligation to prepare transfer pricing report continues with the previous regulation. The annual transfer pricing report shall be prepared by the time the filing of corporate tax returns is due. On the other hand, the report should be kept and submitted to the authorities in case that an official request.

Taxpayers who is obligated to file are as follows;

• Corporate income taxpayers registered to the Large Taxpayers Tax Office for their domestic and foreign related party transactions,
• Companies registered to other Tax Offices for their foreign related party transactions,
• Corporate income taxpayers that are operating in Free Trade Zones in Turkey for their related parties in Turkey,
• All corporate income taxpayers for their transactions with their foreign branches and their related parties
  

 

3.     Country by Country Report (CbCR)

The country by country reporting requirements applies to Multi National Group's ultimate parent company resident in Turkey with annual consolidated group revenue amounting to EUR 750 million or more in the accounting period prior to the reported accounting period.

The MNEs subject to CbCR , might file the report under "ultimate parent entity" or "surrogate entity" status. 

Above mentioned report must be prepared until the end of the 12th month following the accounting period and submitted to the Tax Authority by electronically. The Turkish ultimate parent entities of MNE groups are required to file the first CbCR for the 2019 fiscal year until December 31st, 2020. 

On the other hand, the first country by country report shall be prepared for the special accounting periods that start after 01.01.2019 and filed electronically with the Tax Authority by the end of the following special accounting period by the taxpayers who having special accounting period.

CbCR is going to be prepared by filling the tables in Annex 6 of the Draft Communiqué No. 4.  The electronic submission of the CbCR will be sent by connecting to the BTRANS link on the website of the Revenue Administration (www.gib.gov.tr). The current user code and password is going to be used.

The documentation format is going to be announced by the Ministry of Treasury and Finance, through BTRANS. Changes are also going to be announced through BTRANS. 

Since the documentation is going to be transmitted to the Revenue Administration through BTRANS system, companies must complete BTRANS applications before the first data transmission date.

Notification Obligation 

Accordingly, taxpayers should report to the Tax Authority the following:

a) whether they are an "ultimate parent entity" or a "surrogate entity",

b) which entity is responsible for reporting on behalf of the group, and

c)  the reporting period.

The notification periods for taxpayers are as follows:

 

• August 31st, 2020 for 2019 CbCR ; and
• End of June for all subsequent years.

• August 31st, 2020 for the first CbCR ; and
• By the end of the sixth month of the special accounting period (considering that it is by the end of June for those having calendar year-based accounting period).

 

Notification obligation is going to be fulfilled by filling the tables in Annex 5 of the Draft Communiqué No. 4.  The mentioned form is given in circular annex (Annex 1). Hard copy form (by hand or by mail) will not be accepted. 

However, mentioned Draft Communique has not been accepted as law. Explanation on the subject is expected in the near future.

According to the information above, Turkish corporate income taxpayers that are members of a multinational group should complete the BTRANS application before 31.08.2020. Although the Communique is still draft, related taxpayers should complete the preparations as they will submit the information to the Tax Authority.

 Annex 1

Best Regards,