What counts as a related party
Shareholders, companies they control, group companies, directors and their relatives, and — in some cases — counterparties in low-tax jurisdictions. Typical transactions: purchases and sales of goods, management and IT service fees, royalties, loans and cash pooling, and cost recharges.
The five documentation requirements
| Document | Who prepares it | Deadline |
|---|---|---|
| Transfer pricing form (appendix to the CIT return) | All corporate taxpayers with related-party transactions | With the annual CIT return (30 April for calendar-year companies) |
| Annual transfer pricing report | Companies with related-party transactions; scope depends on taxpayer type | Prepared by the CIT return date; submitted within 15 days if requested |
| Master file | Members of a multinational group whose total assets and net sales in the previous year's return are both TRY 500 million or more | By the end of the 12th month after year-end; submitted within 15 days if requested |
| CbC notification form | Turkish members of groups with EUR 750 million+ consolidated revenue | Filed electronically by the end of the 6th month after year-end |
| Country-by-country report | Turkish ultimate parents or designated entities of groups with EUR 750 million+ revenue | By the end of the 12th month after year-end |
The master file threshold is based on the previous year's corporate tax return: a group company must prepare it when both its total assets and its net sales are TRY 500 million or more.
What the annual report contains
Company and group overview, organisation and business lines
Description of each related-party transaction and its value
Functional analysis: functions, assets and risks of each party
Choice of method (comparable uncontrolled price, cost plus, resale price, profit split or TNMM) and why
Benchmarking study with comparables
Conclusion on whether the prices are at arm's length
Common exposures for foreign-owned companies
Management fees from head office without evidence of the services actually received.
Royalties for brands or know-how without a clear benefit test.
Intercompany loans with non-market interest or above the 3:1 thin capitalisation limit.
Year-end adjustments that change prices after the fact without contractual basis.
Loss-making distributors that bear risks their functions do not justify.
Consequences of getting it wrong
The tax office treats the excess as a disguised profit distribution: it is added back to corporate income, taxed at 25%, and may also be treated as a dividend subject to withholding, plus tax loss penalties and late interest. Good documentation can reduce penalties even where an adjustment is made.
Frequently asked questions
Do domestic related-party transactions need documentation?
Yes. Transactions between Turkish group companies are also covered, although the report requirements differ by taxpayer type.
Can we use the group's global benchmarking?
Often yes, if it is relevant to Türkiye and the functional analysis matches the Turkish entity. A local review is still needed.
Is an advance pricing agreement possible?
Yes. Taxpayers can apply for unilateral, bilateral or multilateral advance pricing agreements with the Revenue Administration.
Get a transfer pricing health check.
Our Tax Advisory team reviews your intercompany flows and prepares the Turkish documentation.
This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.