What Is Transfer Pricing (Transfer Fiyatlandırması)?
Transfer pricing is the area of Turkish tax law requiring transactions in goods, services and rights between related parties to be priced at arm's length and supported by documentation.
Turkish corporate tax law applies the arm's length principle to transactions with related parties. Where pricing departs from arm's length, the difference is treated as a disguised distribution of profit and added back to taxable income.
Methods for establishing an arm's length price follow the OECD Guidelines: comparable uncontrolled price, cost plus, resale price, transactional net margin and profit split.
Documentation obligations cover an annual transfer pricing report, a form attached to the corporate tax return, and — for multinational groups meeting the relevant criteria — a master file and country-by-country reporting. Which document is mandatory for whom depends on criteria that are updated by legislation.
In practice, intra-group management fees, brand and licence payments, intra-group financing and head office cost allocations attract the most scrutiny. For foreign-owned companies, the transfer pricing file is typically among the first documents requested in a tax inspection.