Country-by-Country (CbC) Reporting is an international initiative aimed at enhancing transparency and combating base erosion and profit shifting (BEPS) among multinational enterprises (MNEs). Turkey, as a member of the OECD and a signatory to the BEPS project, has implemented regulations regarding CbC reporting to ensure compliance and facilitate the exchange of information among tax authorities. This article will provide a detailed overview of CbC reporting in Turkey, including its scope, requirements, and important considerations.

1. Legislative Framework: In Turkey, the legal framework for CbC reporting is established under Law No. 6728 on the Prevention of the Laundering of Crime Revenues and Regulation on Country-by-Country Reporting (the “Regulation”). The Regulation aligns with the OECD’s recommendations and provides guidelines for the implementation of CbC reporting in Turkey.
2. Applicability: The CbC reporting requirements in Turkey apply to Turkish MNE groups whose consolidated revenue exceeds TRY 3.5 billion (approximately USD 500 million) in the preceding fiscal year. However, it’s essential to stay updated with any changes in the threshold, as regulations may evolve over time.
3. Reporting Obligations: Under the Turkish regulation, the ultimate parent entity (UPE) of an MNE group, which is a Turkish tax resident, must file the CbC report with the Turkish Revenue Administration (TRA). If the UPE is not located in Turkey, but there is a surrogate parent entity (SPE) in Turkey, the SPE is responsible for filing the CbC report.
4. CbC Reporting Template: The CbC report should be prepared using the OECD’s standard template and must include various information, such as the group’s revenue, profit, taxes paid and accrued, tangible assets, employees, and details of constituent entities in different jurisdictions. The report should be submitted electronically to the TRA within 12 months following the end of the reporting fiscal year.
5. Local Filing Requirements: In addition to the CbC report, Turkish constituent entities of the MNE group are required to submit a notification to the TRA, indicating the identity and tax residency of the UPE or the SPE. This notification must be filed by the last day of the fiscal year.
6. Exchange of Information: The TRA exchanges the CbC reports with tax authorities of other jurisdictions through the automatic exchange of information (AEOI) mechanism. This enables participating countries to gain insights into the global operations and tax contributions of MNE groups and aids in risk assessment and enforcement actions.
7. Penalties for Non-Compliance: Failure to comply with CbC reporting obligations in Turkey can result in penalties, including financial sanctions and administrative measures. It is crucial for MNEs to ensure timely and accurate compliance to avoid any adverse consequences.
8. Confidentiality and Data Protection: Turkey has implemented measures to ensure the confidentiality and protection of CbC reports and related information. The TRA maintains strict confidentiality, adhering to both domestic regulations and international standards.
9. Additional Considerations: It is recommended for MNEs operating in Turkey to establish robust internal systems to capture relevant data, prepare accurate CbC reports, and ensure compliance with local requirements. Engaging tax professionals or advisors with expertise in CbC reporting can help navigate the complexities and ensure compliance.

CbC reporting in Turkey plays a significant role in enhancing transparency and preventing base erosion and profit shifting. By understanding the scope, requirements, and obligations, MNEs can effectively fulfill their reporting duties and contribute to the global fight against tax avoidance. Staying updated with the evolving regulations and seeking professional guidance can assist in ensuring compliance and mitigating any potential risks associated with non-compliance.

It is important to note that CbC reporting requirements may vary from country to country, and MNEs operating in Turkey should familiarize themselves with the specific regulations and guidelines provided by the Turkish Revenue Administration.

Furthermore, it is advisable for MNEs to maintain accurate and comprehensive documentation to support the information reported in the CbC report. This includes maintaining records of financial statements, transfer pricing documentation, and other relevant data that may be required during tax audits or assessments.

In addition to fulfilling the regulatory requirements, CbC reporting can provide valuable insights to MNEs themselves. The information contained in the report can be used for internal purposes, such as strategic planning, risk assessment, and identifying areas for improvement in their global operations.

It is worth mentioning that the global tax landscape is continuously evolving, and CbC reporting requirements may be subject to changes and updates. Therefore, MNEs operating in Turkey should closely monitor any updates or amendments to the regulations to ensure ongoing compliance.

In conclusion, CbC reporting in Turkey is an essential component of the country’s efforts to promote transparency and combat tax avoidance. By understanding the legislative framework, meeting reporting obligations, and staying informed about updates, MNEs can effectively navigate the CbC reporting requirements in Turkey and contribute to a fair and equitable global tax system. Seeking professional advice and assistance can also be beneficial in ensuring accurate compliance and minimizing potential risks associated with non-compliance.