The Transfer Pricing (TP) regulations, liabilities are about, pricing level or methodology of several transactions (such as buying/selling of commodities, services, intangible assets, construction and production works, loan/lend of money, bonuses, cost charge-outs, management fees) among strictly defined broad related party members (such as family, relatives, group firms, authorized distributors, shareholders etc.) whether they are performed according to and in line with the market and other comparable transactions and in this sense TP is about paying the exact, deserved amount of tax, at the appropriate place and time according to the generated profit.
Corporate Taxpayers, which have related party transactions within the fiscal year, are obliged to prepare that fiscal year’s transfer pricing report and also obliged to declare a Transfer Pricing Form with that year’s CIT declaration.
The most critical and important thing about this subject is that regardless of the size or scale of the organization, regardless of the monetary volume, amount of the transaction and regardless of the generated tax for that tax year, every organization that has related party transactions are liable to the transfer pricing regulations and has to fulfill its requirements.
The other critical factor about this subject is, that any preparation related to Transfer Pricing should be unique to the firm that operates in Turkey and every document that is declared must be prepared in Turkish. Thus, any kind of corporate, general TP reports prepared by the headquarters, group firms are directly rejected by the authorities.
Besides the two important issues, while the comparable prices and the market that the organization belongs to are observed, it is eagerly preferred by the authorities and far more in line with the general TP regulations, that the data related to these subjects should be derived from domestic data and should be related to the circumstances of the Turkish market.
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