Turkey announced draft Communique introducing CBCR, Cost Contribution Agreements and Additional Comparability Factors

Specific transfer pricing rules are valid in Turkey as of the beginning of 01 January 2007 under Article 13 of the Corporate Income Tax Law (the CITL) No. 5520 with the title “Disguised Profit Distribution through Transfer Pricing”.

The regulations under Article 13 follow the arm's length principle, established by the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Guidelines), and are applicable to all financial, economic, commercial transactions and employment relations between related parties. Details on the application of Article 13 are provided in two Communiqués regarding disguised profit distribution through transfer pricing.

On March 16, 2016 the Turkish Revenue Administration (“TTA”) announced on its website a new Draft General Communique numbered 3 on Disguised Profit Distribution through Transfer Pricing with the following aim: