Turkey: Draft guidelines on advance pricing agreements

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Turkey: Draft guidelines on advance pricing agreements

askin.jpg

Devrim Askin

Turkish Revenue Administration (TRA) recently published draft guidelines on advance pricing agreements (APAs) with the aim of informing corporate taxpayers planning to apply for an APA. In this context, the draft guidelines provide information regarding:

  • definition, scope and duration of APA;

  • APA process which consists of five steps (pre-filing, formal application, preliminary evaluation, analysis, and unconditional/conditional acceptance or rejection of the application);

  • preparation of annual APA report for monitoring the implementation of the signed APA; and

  • revision, renewal and cancellation of an existing APA.

In fact, the draft guidelines reiterate the explanations already made in the existing transfer pricing legislation, particularly the provisions contained in the Transfer Pricing General Communiqué No.1. However, more specific information is requested by TRA from taxpayers in their APA application than those listed under section 7.2 of the above-mentioned General Communiqué No.1, including:

  • function-risk matrix between related parties;

  • flow chart of all intercompany transactions;

  • information on the type of intangibles (patent, trademark, know-how, industrial design and so on) related to the transaction covered in the APA;

  • information on (if any) R&D activities that are carried out by the Turkish entity;

  • critical assumptions regarding functions, financial issues, accounting practices, economic conditions, legal regulations and any other related matters;

  • (if any) relevant tax audit reports;

  • any other APAs applied for, or concluded, by the foreign related parties;

  • any transfer pricing documentation prepared by the foreign related parties involving in the intercompany transaction that is the subject matter of APA;

  • (if any) relevant cost contribution agreements; and

  • (if any) all relevant agreements between related parties; and

  • provision of financial statements according to Turkish GAAP [generally accepted accounting principles].

It can be said that such informative guidelines are beneficial for taxpayers intending to request an APA to ensure that the APA process is carried out by TRA in a transparent and cooperative environment.

On the other hand, it would be appropriate to review the scope of information to be submitted in the APA application in order not to create any additional burden on taxpayers and to make more explicit explanations regarding comparable searches, comparability adjustments, financial analyses and critical assumptions so that taxpayers, to the extent possible, can prepare their application files more completely and hence the APA process can be concluded in a timely and efficient manner.

Last but not least, there is no specific date given by TRA as to when the draft guidelines will be completed and published as a final version. In this context, TRA may provide an insight about the expected date for the relase of final guidelines after receiving public comments.

Devrim Askin (devrim.askin@tr.pwc.com)

PwC Turkey

Tel: + 90 212 326 6662

Website: www.pwc.com.tr

more across site & shared bottom lb ros

More from across our site

Ascoria’s chief revenue officer shares her career wisdom garnered from the disparate worlds of tax technology, electric cables, radio DJing and more
Businesses no longer have a choice when it comes to tax technology transformation. Pavlo Boyko of TMF Group says the question is simply: sink or swim?
The firm is hunting for a senior TP manager in its quest to build a full-service practice in Indonesia, A&M Tax’s Jakarta head Jaap Zwaan tells ITR
With a new government in place, the evolving tax landscape presents both opportunities and challenges for taxpayers
Major economies have expressed concerns, with China arguing a US global minimum tax exemption would be a violation of the principle of fair competition – ITR understands
Senator Richard Colbeck told ITR he was concerned by the decision to let PwC Australia tender for government contracts again after a scandal-induced ban
Whether it be due to a fragmented advisory market or a rise in M&A, Italy’s frenetic hiring has not gone unnoticed by ITR’s Talent Tracker
The deal gives Azets 14 new partners and boosts its Swedish revenues to over $100 million; in other news, Svalner Atlas launched in Copenhagen
The tax technology company will be providing a free demonstration of its OTP software and offering best practice advice on whether to ‘buy or build’ on September 8
Johanes Glorinus Saragih of Indonesia’s Directorate General of Taxes outlines the nation’s delicate geopolitical situation, as it sits between a rock and a hard place with the US and pillar two
Gift this article