No : 2020-118
Konu : CbCR Notification– Deadline October 30th
Turkey Has Ratified the “Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports”
Country-by-Country Reporting (CbCR) Obligation in Turkey
Based on the Presidential Decree No. 2151, CbCR reporting requirement is brought for the ultimate parent company of Turkish multinational groups, which has a consolidated turnover of 750 Million EUR.
Companies in this scope are required to file the first reporting until December 31, 2020 (within 12 months of the end of the accounting period for companies with special accounting periods).
CbCR Notification Obligation in Turkey
According to the recent regulations, multinationals in Turkey must file CbCR Notification Form. Other companies that fall within the scope of CbCR but whose ultimate parent company is domiciled in another country will be also obliged to carry out CbCR notification.
This notification will be made through an electronic form to be filled out via Internet Tax Office of Turkish Tax Authorities. Accordingly, the CbCR notification will be made until October, 30th 2020 by all companies within the scope of CbCR reporting regardless of their parent company is resided in Turkey.
Ratification of Multilateral Competent Authority Agreement
Let’s get in to details:
Turkey has ratified the “Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports” with a Presidential Decree released in the Official Gazette of October 1st.
This means that Turkey will be exchanging CbCR Reports, starting from FY2019 and the first CbCR filing will be done by Turkish Groups until December, 31st 2020 in Turkey.
This is good news for foreign multinationals as they will not have to file CbCR in Turkey. Nevertheless, they have to file CbCR notification until October, 30th 2020, Friday through Internet Tax Office of Turkish Tax Authorities.
In this sense, an announcement was also published on the website of the Turkish Revenue Administration on October 1st, 2020 at https://intvrg.gib.gov.tr/intvrg_duyuru/duyurular.html.
In the announcement, it is stated that “CbCR Notification Form”, which is among the transfer pricing documentation obligations, is available on the Internet Tax Office in the Section of “Other Notifications and Information Entries” and should be filled in accordance with the explanations made in the General Communiqué No. 4 on Disguised Profit Distribution by Means of Transfer Pricing”.
According to the statement made by Turkish Tax Authorities, taxpayers who will submit a CbCR Notification Form must first obtain a user code, passcode and password from the tax offices they are affiliated with, with the authority to “Reporting on Country Basis”.
In terms of CbCR obligations, we recommend that until October 30th, 2020;
- First of all, Turkish and foreign capital companies within the scope obtain a user code, passcode and password authorized for CbCR Notification from the tax office they are affiliated with.
- Companies with headquarters in Turkey file the CbCR Notification Form on behalf of all group companies (They do not need to report overseas group companies in the said form.)
- Companies with foreign headquarters file CbCR Notification Form on behalf all group companies in Turkey if there are more than one entity in Turkey (All Turkish entities of foreign multinationals do not need to file CbCR notification form. One of them could report on behalf of all group entities in Turkey)
- Turkish and foreign capital companies fill out the CbCR Notification Form through the Internet Tax Office of Turkish Tax Authorities from section of the “Internet Tax Office> Other Notifications and Information Entries”.
Please click to access the Country Based Reporting Notification Form (Annex-5).
Finally, it is clear that recent changes in Turkish transfer pricing legislation will affect many companies very closely. For that reason, it is useful to initiate the necessary work on the transfer pricing documentation including Masterfile, local file and CbCR.
Please contact us for your questions regarding our Bulletin CbCR obligations in Turkey and our services, which include software-based technology solutions (www.tinvento.com) for CbC Reporting.
Şaban Küçük & Ramazan Biçer
Tax & International Advisory | Transfer Pricing & Taxation