Who is a related party
Shareholders and companies they control, directly or indirectly
Other group companies
Directors, managers and their close relatives
Counterparties in jurisdictions designated as harmful tax regimes
Methods
Turkish rules follow the OECD Transfer Pricing Guidelines. The taxpayer chooses the most appropriate method:
| Method | Typical use |
|---|---|
| Comparable uncontrolled price (CUP) | Commodities, loans, some royalties |
| Cost plus | Manufacturing and services for group companies |
| Resale price | Distributors buying from the group |
| Transactional net margin method (TNMM) | Most distributors and service providers in practice |
| Profit split | Highly integrated operations or unique intangibles |
Documentation and deadlines
| Document | Deadline |
|---|---|
| Transfer pricing form (appendix to CIT return) | With the annual corporate tax return |
| Annual transfer pricing report | Ready by the CIT return date; submitted within 15 days if requested |
| Master file (groups above thresholds) | End of the 12th month after year-end |
| Country-by-country report (groups with EUR 750m+ revenue) | End of the 12th month after year-end; notification by the 6th month |
Related rules
Thin capitalisation: related-party debt above 3 times equity (6 times for related banks) is thin capital; interest on the excess is non-deductible and treated as a dividend.
Financing expense restriction: where total borrowing exceeds equity, 10% of the related financing expense is non-deductible.
Controlled foreign companies: passive income of controlled low-taxed foreign subsidiaries can be taxed in Türkiye.
Advance pricing agreements: unilateral, bilateral or multilateral APAs can be requested.
Consequences of an adjustment
The excess is added back to taxable income, taxed at 25%, and may also be treated as a dividend subject to withholding, plus penalties and late interest. Good documentation reduces penalty exposure.
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This page provides general information and is not legal or tax advice. Every situation is different; talk to us before you act.