Turkey has implemented Country-by-Country Reporting (CbCR) in accordance with OECD BEPS Action 13 and Transfer Pricing Guidelines, with the Turkish Revenue Administration (Gelir İdaresi Başkanlığı – GİB) responsible for oversight. The CbCR framework aims to enhance tax transparency, prevent profit shifting, and ensure compliance with international tax regulations.

This guide provides CFOs and tax professionals with a structured overview of Turkey’s CbCR framework, including applicability, reporting obligations, submission process, penalties, and key resources.

Applicability of CbCR in Turkey

Criteria for Reporting

CbCR obligations apply to multinational enterprise (MNE) groups that:

• Have consolidated annual revenue of at least TRY 5.5 billion (approx. EUR 750 million) in the preceding financial year.
• Include at least one entity or permanent establishment (PE) in Turkey.

Local Filing Requirements

A Turkish entity must file a CbC report if:

• It is the Ultimate Parent Entity (UPE) of the MNE group.
• It has been designated as the Surrogate Parent Entity (SPE) for CbCR purposes.
• The UPE is in a jurisdiction that does not require CbCR or does not have a qualifying exchange agreement with Turkey.

Relevant Legislation

• General Communiqué on Disguised Profit Distribution Through Transfer Pricing (Serial No: 4 & 5) – Establishes Turkey’s CbCR framework.
• OECD BEPS Action 13 – Provides the international standard for CbCR requirements.

Reporting Requirements

Content of the CbC Report

The CbC report must contain jurisdictional financial data, including:

• Total revenues (from related and unrelated party transactions).
• Profit or loss before income tax.
• Income tax paid and accrued.
• Stated capital and retained earnings.
• Number of employees.
• Tangible assets, excluding cash or cash equivalents.

Notification Requirement

• All Turkish entities within an MNE group must notify the GİB regarding which entity will file the CbC report and in which jurisdiction.
• The notification must be submitted electronically via the Turkish Revenue Administration portal (e-Transfer Pricing System) before the end of the financial year.

Submission Platform

• Reports must be electronically filed via GİB’s online system, using the OECD CbCR XML schema.

Resource

Filing instructions and guidelines are available on the Turkish Revenue Administration website:
Turkish Revenue Administration (GİB)

Filing Deadlines

• CbC Reports: Must be filed within 12 months after the end of the financial year.
  • Example: For a financial year ending 31 December 2023, the report must be submitted by 31 December 2024.
• Notifications: Must be filed before the end of the financial year.

Penalties for Non-Compliance

Penalties and Consequences

Failure to comply with Turkey’s CbCR requirements may result in:

• Administrative fines of up to TRY 2,500,000 for failure to submit or inaccurate reporting.
• Additional penalties for persistent non-compliance.
• Increased scrutiny from the GİB, leading to potential tax audits.

Mitigation Measures

• Companies can apply for extensions or appeal penalties if they can demonstrate reasonable cause for non-compliance.

Confidentiality and Data Exchange

Data Protection

• The GİB ensures that CbC reports remain confidential and are only used for tax risk assessment purposes.
• Reports are automatically exchanged with jurisdictions that have a bilateral exchange agreement with Turkey.