It is necessary to keep up with international practices as well as local.
Transfer pricing regulations were initiated in order to prevent companies taking part in unlawful tax competition in the international arena and to prevent corrosion of tax assessments related to the group companies’ trades of goods and services. Parallel to the development of international trade, transfer pricing has become a matter of priority for every country’s Ministry of Finance and tax assessments.
According to the arm’s length principle of transfer pricing, the prices set for transactions between group companies must be parallel to those which are applied between unrelated companies for the same transactions. According to the transfer pricing enforcements in Turkey, companies are obliged to prepare an annual transfer pricing report within certain limits, and submit the “Form relating to the Transfer Pricing, Controlled Foreign Company and Disguised Capital” included in the corporate tax return.
Transfer pricing regulations have not only gained importance for every country’s internal legislations, but also for international taxation, ever since operations were implemented against harmful tax competition within the OECD. Especially OECD’s BEPS (Base Erosion Profit Shifting) regulations have been implemented as advisory jurisdictions, aiming to have a direct influence on the internal legislations of a country.
As BDO, with the global data banks we have access to and our expert transfer pricing team, we provide services in the areas listed below:
- Preparation of annual transfer pricing reports,
- Preparation of the “Master File” reports evaluating transactions between group companies in terms of transfer pricing,
- Evaluation of current enforcements and agreements within the frame of transfer pricing provisions, and advising senior management of results,
- Assisting with the construction of a suitable structure in accordance with transfer pricing provisions for restructuring and new establishment projects,
- Providing services to oversee the agreement process with the Department of Finance for taxpayers who apply for a cash pricing agreement as the transfer pricing method to be applied,
- Providing services to assist with filling out the “Form relating to the Transfer Pricing, Controlled Foreign Company and Thin Capitalization” included in the corporate tax return,
- Consultancy services related to transfer pricing evaluations to be carried out by the Ministry of Finance.