# Türkiye: transfer pricing (transfer fiyatlandırması) (2026) v0.1

Türkiye taxes profit shifted to related persons as a disguised profit distribution (örtülü kazanç dağıtımı). The rule is in the Corporate Tax Law no. 5520 (KVK) art. 13. The detail is in the General Communiqué on Disguised Profit Distribution through Transfer Pricing, Serial No. 1 (Official Gazette 18 November 2007), changed by Serial No. 2 (22 April 2008), No. 3 (7 December 2017), No. 4 (1 September 2020) and No. 5 (17 October 2024). The Revenue Administration (Gelir İdaresi Başkanlığı, GİB) administers it. Corporate tax rates, thin capitalisation and the annual return are in [tr-corporate-income-tax](tr-corporate-income-tax.md). Withholding on payments abroad and treaties are in [tr-cross-border](tr-cross-border.md).

## Who this applies to

- **Companies.** Every corporate taxpayer (kurum) that buys or sells goods or services with a related person at a price that is not at arm's length has distributed profit in disguise, in whole or in part (KVK art. 13(1)). Purchases, sales, manufacturing, construction, renting, lending and borrowing money, and bonuses, wages and similar payments always count as a purchase or sale of goods or services (art. 13(1)).
- **Sole traders.** The same rule applies to a business owner taxed under the Income Tax Law no. 193 (GVK): the gap between the arm's length price and the price used, to the detriment of the business, is treated as withdrawn from the business, and KVK art. 13 fills any gap (GVK art. 41(1)(5)). A sole trader does not prepare the annual transfer pricing report (Communiqué section 7.3.2(c)).
- **Related person** (art. 13(2)): the company's own shareholders; persons or companies connected with the company or its shareholders; and persons or companies that the company controls or is controlled by, directly or indirectly, through management, supervision or capital. Spouses of shareholders, and their ancestors, descendants and relatives by blood or marriage to the third degree, are related persons too.
- **The 10% test** (art. 13(2)). Where the link runs through shareholding, it counts only if there is at least 10% of shares, votes or profit rights. A person with at least 10% of votes or profit rights without being a shareholder is also related. Related persons' holdings are added together.
- **Indirect holdings** (Communiqué Serial No. 4, section 3.3). An indirect holding is the product of the holdings along the chain, plus any direct holding. If X owns 20% of Y and Y owns 80% of Z, X and Z are linked at 16% and are related. If D owns 20% of C, C owns 40% of B and B owns 50% of A, the link is 4% and the 10% test fails; with a further 7% direct holding in A it is 11% and passes. A link through management or supervision counts whatever the shareholding: a general manager holding 1% is related to the company (deals under the employment relationship aside).
- **Distributors and dealers** (Serial No. 1, section 3.1.3, as added by Serial No. 2). A foreign company and the Turkish company that imports and distributes its goods in Türkiye are related persons whether or not either holds shares in the other. A plain dealership in the ordinary course of business does not make the parties related for the goods and services of the dealership; other deals between them can still be related-party deals.
- **Listed countries.** Every transaction with a person in a country or region announced by the President as a harmful tax regime is treated as a related-party transaction (art. 13(2)).
- **Domestic deals.** Between fully liable companies, and Turkish branches or permanent representatives of foreign companies, a domestic transaction is a disguised distribution only if it causes a Treasury loss: tax of the company and the related person, taken together, assessed too low or too late (art. 13(7)).

## Rates, bands and thresholds

| Item | Rate or amount | Year | Source |
|---|---|---|---|
| Related person through shareholding, votes or profit rights | At least 10% | 2026 | KVK art. 13(2), https://www.mevzuat.gov.tr/MevzuatMetin/1.5.5520.pdf |
| Advance pricing agreement, longest term | 3 years | 2026 | KVK art. 13(5) |
| Advance pricing agreement renewal, apply before expiry | At least 9 months | 2026 | Communiqué Serial No. 3, section 6, https://www.resmigazete.gov.tr/eskiler/2017/12/20171207-9.htm |
| Advance pricing agreement fee | None (Fees Law tariff XII repealed by Law 7061) | 2026 | Harçlar Kanunu no. 492, tariff 8, XII, https://www.mevzuat.gov.tr/MevzuatMetin/1.5.492.pdf |
| Transfer pricing form: related persons that may be left off | Annual net total per related person below TRY 30,000 | 2026 | Communiqué Serial No. 4, section 7.5, https://www.resmigazete.gov.tr/eskiler/2020/09/20200901-3.htm |
| Master file (genel rapor): who prepares | Member of a multinational group with prior-year total assets and net sales both TRY 500 million or more | 2026 | Communiqué Serial No. 4, section 7.2 |
| Country-by-country report: group threshold | Prior-year consolidated group revenue EUR 750 million or more | 2026 | Communiqué Serial No. 4, section 7.4; Serial No. 5, art. 2, https://www.resmigazete.gov.tr/eskiler/2024/10/20241017-4.htm |
| Corporate tax on the adjustment | 25% (30% for the financial sector) | 2026 | KVK art. 32(1) |
| Withholding on the deemed dividend to a non-resident company | 15% of the grossed-up amount | 2026 | KVK art. 30(3); Decision 2009/14593 item 12 as changed by Decision 9286; GİB table, https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Fyardim-kaynaklar%2Fyararli-bilgiler%2Fkvk-nun-30-ve-gecici14-ile-gvk-nun-gecici-67inci-maddeleri-uyarinca-dar-mukellef.pdf |
| Withholding on the deemed dividend to an individual | 15% of the grossed-up amount | 2026 | GVK art. 94(6)(b); GİB table, https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Fyardim-kaynaklar%2Fyararli-bilgiler%2Fgelir-vergisi-kanununun-94uncu-maddesinde-yer-alan-kesinti-oranlari.pdf |
| Tax loss penalty | 1 times the tax lost (3 times for fraud under VUK art. 359) | 2026 | VUK art. 344, https://www.mevzuat.gov.tr/MevzuatMetin/1.4.213.pdf |
| Tax loss penalty with complete and timely TP documentation | Cut by 50% | 2026 | KVK art. 13(8); Communiqué Serial No. 4, section 8.2 |
| Late interest on assessed tax | 3.7% a month | 2026 | VUK art. 112(3); Law 6183 art. 51 and Decision 10556, https://www.mevzuat.gov.tr/MevzuatMetin/1.3.6183.pdf |
| Special irregularity penalty for not giving information or documents | TRY 35,000 (first-class traders), TRY 17,000 (second-class), TRY 8,700 (others) | 2026 | VUK repeated art. 355(1), amounts from VUK Communiqué 588 |

## The taxable base

- **Arm's length principle** (art. 13(3)). The price used with a related person must match the price that unrelated parties would agree. Records, schedules and documents showing how the price was worked out must be kept as evidence.
- **Methods** (art. 13(4)). The company uses the method that best suits the transaction: comparable uncontrolled price; cost plus (costs increased by a reasonable gross profit margin); resale price (resale price to unrelated buyers less a reasonable gross margin); and the transactional profit methods, which are the transactional net margin method and the profit split method. If none of these can reach an arm's length price, the company may use its own method suited to the transaction. There is no order of priority among the methods (Communiqué Serial No. 4, section 5). Internal comparables are used first; external comparables are used where no reliable internal one exists (Serial No. 1, section 4).
- **Advance pricing agreement** (art. 13(5)). The company can agree the method with the Ministry for up to 3 years. Unilateral, bilateral and multilateral agreements are possible. An agreement can be extended to open past periods where voluntary disclosure (pişmanlık) and correction (ıslah) rules allow and the agreement's conditions held in those periods; tax already paid is not refunded. Extra profit from applying the agreement to a past period is not a disguised distribution, and no dividend withholding is due, if the extra corporate tax is paid on time, the profit is booked to that year's income in the current books, and the amount is booked as a receivable from the foreign related party or collected (Serial No. 3, section 6). Any corporate taxpayer can apply for its cross-border related-party deals and for deals between free-zone and non-free-zone companies (Serial No. 3, section 6.1). A renewal must be requested at least 9 months before the agreement ends. No fee is charged: the Fees Law tariff for this agreement was repealed by Law 7061 (2017).
- **What the adjustment does** (art. 13(6)). The profit distributed in disguise is not deductible for corporate tax (KVK art. 11(1)(c), see [tr-corporate-income-tax](tr-corporate-income-tax.md)). For income and corporate tax it is treated as a dividend distributed, or for a branch as a remittance to head office, on the last day of the period in which the conditions arose.
- **Grossed-up withholding.** The disguised profit is treated as a net dividend. It is grossed up and withholding is applied at the rate that fits the recipient: KVK art. 30(3) for a non-resident company, KVK art. 15 for an exempt company, GVK art. 94(6)(b) for an individual (Communiqué Serial No. 1, sections 9 and 9.3). At 15%, the gross amount is the disguised profit divided by 0.85.
- **Corresponding adjustment.** The other party's earlier tax is corrected, but only once the tax assessed on the company that made the disguised distribution is final and paid (art. 13(6); Serial No. 1, section 9). Where the related party is a fully liable Turkish company, the deemed dividend can qualify for the dividend exemption, which is how the two sides are put right (Serial No. 1, section 9).
- **Intra-group services.** A payment for an intra-group service is taxed according to what the service really is, under domestic law and the relevant treaty. A cost-sharing charge for the right to use an intangible is treated as a royalty (Serial No. 4, section 11.3).
- **Thin capitalisation** (KVK art. 12) is a separate rule: related-party debt above 3 times equity is thin capital and its interest is a deemed dividend. Detail is in [tr-corporate-income-tax](tr-corporate-income-tax.md).

## Deadlines and filing

- **Documentation set** (Serial No. 4, section 7): the master file (genel rapor), the annual transfer pricing report, the country-by-country reporting notification form, the country-by-country report, and the transfer pricing, controlled foreign company and thin capitalisation form. They are prepared under VUK arts. 148, 149 and repeated art. 257 and handed to GİB or a tax inspector on request. Documents in a foreign language must come with a Turkish translation.
- **Transfer pricing form** (Serial No. 4, section 7.5). Every corporate taxpayer with related-party purchases or sales in the period fills in the form (Annex 3) and files it with the annual corporate tax return. A related person whose annual net total is below TRY 30,000 does not have to be listed. The corporate tax return is due by the end of the fourth month after the period, so 30 April 2027 for a 2026 calendar-year company (GİB filing table; KVK art. 14(3) still says the 25th).
- **Annual transfer pricing report** (Serial No. 4, section 7.3). It follows Annex 4 and must be ready by the corporate tax return deadline, then handed over on request. Who must prepare it (section 7.3.1, as changed by Serial No. 5):
  - companies registered with the Istanbul Large Taxpayers Tax Office (İstanbul Defterdarlığı Büyük Mükellefler Vergi Dairesi Müdürlüğü): domestic and cross-border related-party deals;
  - all other corporate taxpayers: cross-border related-party deals;
  - free-zone companies: domestic related-party deals;
  - all corporate taxpayers: deals with their foreign branches and with related persons in free zones.
  No report is needed (but the same information must be given on request) for other companies' domestic deals, free-zone companies' cross-border deals, and income taxpayers' deals (section 7.3.2).
- **Master file** (Serial No. 4, section 7.2). A corporate taxpayer in a multinational group whose prior-year balance sheet total assets and income statement net sales were both TRY 500 million or more prepares it by the end of the accounting period that follows the one it covers, and hands it over on request. One Turkish group company may prepare it for the others. A group master file prepared abroad may be used, with a Turkish translation.
- **Country-by-country report** (Serial No. 4, section 7.4). A group with prior-year consolidated revenue of EUR 750 million or more files it electronically by the end of the 12th month after the reporting period. The Turkish ultimate parent or surrogate parent files. A Turkish group company files instead where the parent's country has no filing rule, has no agreement for exchange in force with Türkiye, or has a systemic failure. There is no exemption once the threshold is passed.
- **Country-by-country notification form.** Each group member in scope files the notification (who is the parent or surrogate, who reports, the period) through the Digital Tax Office by the end of the 6th month after the reporting period (Serial No. 5, art. 2, from 1 September 2024). Paper forms are not accepted. A wrong form can be corrected by the end of the month after the deadline; a later correction is penalised under the VUK (Serial No. 4, section 7.4).

## Penalties and interest

- **Tax loss penalty.** Tax assessed because of a disguised distribution carries a tax loss penalty of one times the tax lost (VUK art. 344), three times where it was caused by fraud under VUK art. 359.
- **50% cut for documentation** (KVK art. 13(8); Serial No. 4, section 8.2). If the transfer pricing documentation duties were met in full, on time and in the set form, the tax loss penalty on the disguised profit is halved. Errors that do not affect the substance do not block the cut. The cut is lost if GİB or the inspector finds the duties were not met in full and on time, and never applies to VUK art. 359 fraud. Where a duty has no deadline, "on time" means within the period GİB or the inspector sets.
- **Late interest.** Tax assessed later carries late interest (gecikme faizi) from the normal due date at the late-payment surcharge rate, 3.7% a month for 2026; part months are not counted (VUK art. 112(3); Law 6183 art. 51; Decision 10556).
- **Documents not given.** Not providing the reports, forms and notifications in time, or giving incomplete or misleading information, is penalised under the VUK (Serial No. 4, section 8.1). The penalty for not meeting duties under VUK arts. 148, 149 and repeated art. 257 is the special irregularity penalty of repeated art. 355: for 2026, TRY 35,000 for first-class traders and the self-employed, TRY 17,000 for second-class traders, TRY 8,700 for others. This covers a late or missing master file, annual report, country-by-country report or notification form, because Serial No. 4, section 7 makes them duties under VUK arts. 148, 149 and repeated art. 257. If the duty is still not met after a new deadline, the penalty is doubled (repeated art. 355).

## Cross-border points

- **Deemed dividend to a foreign parent.** The grossed-up disguised profit carries 15% withholding under KVK art. 30(3) (Decision 9286), on the last day of the period. A tax treaty can lower the rate; see [tr-cross-border](tr-cross-border.md).
- **Branches.** For a Turkish branch of a foreign company, the disguised profit is treated as a remittance to head office (art. 13(6)), which bears the 15% branch remittance withholding (KVK art. 30(6)).
- **Listed countries.** Every deal with a person in a country announced by the President under art. 13(2) is a related-party deal, whatever the shareholding.
- **Bilateral agreements.** A company can ask for a bilateral or multilateral advance pricing agreement, run with the tax authorities of the related parties' countries (Serial No. 3, section 6).
- **Exchange of reports.** A country-by-country report filed in Türkiye can be exchanged with other tax authorities under Türkiye's agreements, including the Convention on Mutual Administrative Assistance in Tax Matters approved by Decision 2017/10969. Its data cannot be the only reason for an assessment (Serial No. 4, section 7.4).

## Worked examples

### Example 1: Cost plus adjustment on sales to a foreign parent

A Turkish manufacturer sells goods to its 100% German parent. Its costs are TRY 10,000,000 and it charges TRY 10,200,000, a 2% mark-up. Unrelated Turkish manufacturers doing the same work for unrelated buyers earn 8% on cost, so the arm's length price is TRY 10,800,000. The TRY 600,000 shortfall is a disguised profit distribution. It is added to the 2026 corporate tax base, which at 25% is TRY 150,000 of extra tax. The TRY 600,000 is also a net dividend to the parent on 31 December 2026. Grossed up at 15%, the gross dividend is TRY 600,000 / 0.85 = TRY 705,882.35 and the withholding is TRY 105,882.35, before any treaty relief.

```oa-check
name: TR cost plus adjustment and grossed-up deemed dividend (2026)
inputs:
  costs: 10000000
  price_charged: 10200000
  arm_markup_pct: 8
  cit_rate_pct: 25
  dividend_wht_pct: 15
steps:
  - arm_price: costs * (1 + arm_markup_pct / 100)
  - adjustment: arm_price - price_charged
  - extra_cit: adjustment * cit_rate_pct / 100
  - gross_dividend: round(adjustment / (1 - dividend_wht_pct / 100), 2)
  - dividend_wht: round(gross_dividend * dividend_wht_pct / 100, 2)
expected:
  arm_price: 10800000
  adjustment: 600000
  extra_cit: 150000
  gross_dividend: 705882.35
  dividend_wht: 105882.35
```

### Example 2: The penalty with and without complete documentation

An audit makes the Example 1 adjustment after the return was filed. The tax lost is TRY 150,000. The tax loss penalty is one times the tax, TRY 150,000. If the company prepared its transfer pricing report and filed its form in full and on time, the penalty is halved to TRY 75,000. Late interest runs from the corporate tax due date at 3.7% a month; the assessment is made 10 full months later, so the interest is TRY 150,000 x 3.7% x 10 = TRY 55,500. With documentation the company pays TRY 280,500; without it, TRY 355,500. The dividend withholding from Example 1 is extra.

```oa-check
name: TR tax loss penalty with the 50% documentation cut (2026)
inputs:
  tax_lost: 150000
  late_rate_pct: 3.7
  full_months: 10
steps:
  - penalty_full: tax_lost * 1
  - penalty_documented: penalty_full * 0.5
  - late_interest: tax_lost * late_rate_pct / 100 * full_months
  - total_documented: tax_lost + penalty_documented + late_interest
  - total_undocumented: tax_lost + penalty_full + late_interest
expected:
  penalty_full: 150000
  penalty_documented: 75000
  late_interest: 55500
  total_documented: 280500
  total_undocumented: 355500
```

## Ask the client first

1. Who holds 10% or more of the company's shares, votes or profit rights, directly or indirectly, and which companies does the company or its shareholders control?
2. Which related-party deals happened in 2026 (goods, services, royalties, loans, rent, salaries), with whom, in which countries, and for how much each?
3. Is the company registered with the Istanbul Large Taxpayers Tax Office, or does it operate in a free zone?
4. Is the company part of a multinational group, and were its 2025 total assets and net sales both TRY 500 million or more? What was the group's 2025 consolidated revenue in euros?
5. How were the 2026 prices set, and is there a benchmarking study or an advance pricing agreement in force?
6. Does any related party sit in a country with no tax treaty with Türkiye?

## Sources

| Source | URL | Read on |
|---|---|---|
| Kurumlar Vergisi Kanunu no. 5520, consolidated: arts. 11, 12, 13, 14, 30, 32 | https://www.mevzuat.gov.tr/MevzuatMetin/1.5.5520.pdf | 2026-10-31 |
| Gelir Vergisi Kanunu no. 193, consolidated: arts. 41(1)(5), 94 | https://www.mevzuat.gov.tr/MevzuatMetin/1.4.193.pdf | 2026-10-31 |
| Vergi Usul Kanunu no. 213, consolidated: arts. 112, 344, repeated art. 355 (2026 amounts from Communiqué 588) | https://www.mevzuat.gov.tr/MevzuatMetin/1.4.213.pdf | 2026-10-31 |
| Amme Alacaklarının Tahsil Usulü Hakkında Kanun no. 6183, consolidated: art. 51 and note on Decision 10556 | https://www.mevzuat.gov.tr/MevzuatMetin/1.3.6183.pdf | 2026-10-31 |
| Harçlar Kanunu no. 492, consolidated: tariff 8, XII | https://www.mevzuat.gov.tr/MevzuatMetin/1.5.492.pdf | 2026-10-31 |
| Transfer pricing General Communiqué Serial No. 1, Official Gazette 18 November 2007 no. 26704 | https://www.resmigazete.gov.tr/eskiler/2007/11/20071118-5.doc | 2026-10-31 |
| Serial No. 2 communiqué, Official Gazette 22 April 2008 no. 26855 | https://www.resmigazete.gov.tr/eskiler/2008/04/20080422-6.htm | 2026-10-31 |
| Serial No. 3 amending communiqué, Official Gazette 7 December 2017 no. 30263 | https://www.resmigazete.gov.tr/eskiler/2017/12/20171207-9.htm | 2026-10-31 |
| Serial No. 4 amending communiqué, Official Gazette 1 September 2020 no. 31231 | https://www.resmigazete.gov.tr/eskiler/2020/09/20200901-3.htm | 2026-10-31 |
| Serial No. 5 amending communiqué, Official Gazette 17 October 2024 no. 32695 | https://www.resmigazete.gov.tr/eskiler/2024/10/20241017-4.htm | 2026-10-31 |
| GİB, consolidated text of Serial No. 1 as amended to Serial No. 5 | https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Ffileadmin%2Fuser_upload%2FTebligler%2F5520%2Ftransferteblig1degisen3.pdf | 2026-10-31 |
| Presidential Decision 9286, Official Gazette 22 December 2024 no. 32760 (art. 3: KVK 30 dividend rate 15%) | https://www.resmigazete.gov.tr/eskiler/2024/12/20241222-15.pdf | 2026-10-31 |
| GİB, KVK art. 30 withholding rates for non-resident companies (table) | https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Fyardim-kaynaklar%2Fyararli-bilgiler%2Fkvk-nun-30-ve-gecici14-ile-gvk-nun-gecici-67inci-maddeleri-uyarinca-dar-mukellef.pdf | 2026-10-31 |
| GİB, GVK art. 94 withholding rates (table) | https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Fyardim-kaynaklar%2Fyararli-bilgiler%2Fgelir-vergisi-kanununun-94uncu-maddesinde-yer-alan-kesinti-oranlari.pdf | 2026-10-31 |
| GİB, Beyanname verme ve ödeme süreleri (filing calendar) | https://cdn.gib.gov.tr/api/gibportal-file/file/getFileResources?objectKey=arsiv%2Fyardim-kaynaklar%2Fyararli-bilgiler%2FBeyannameVermeveOdemeSureleri.pdf | 2026-10-31 |

Not yet confirmed: whether any amending communiqué after Serial No. 5 (17 October 2024) has been published (none found: GİB's consolidated text of 22 October 2024 stops at Serial No. 5, and Official Gazette searches found nothing later); whether the President has announced any country list under KVK art. 13(2) and art. 30(7); the filing date and return for the withholding on a deemed dividend; the content of Annexes 3 to 6 (form, report and country-by-country templates); the advance pricing agreement process steps beyond those listed here; safe harbours or interest rates for related-party loans (none found).

> Contributed by Michael Cutajar.