Transfer Pricing and Disguised Capital Advisory

Transfer Fiyatlandırması ve Örtülü Sermaye Danışmanlığı

Transfer Pricing and Disguised Capital Advisory aka Hidden Capital Advisory … Transfer pricing is a set of pricing arrangements established by relevant institutions regarding transactions between them, such as the sale of goods, the provision of services, or the transfer of intellectual property. Regardless of its scope, it has become one of the most important international tax issues facing large corporations today.

Globally, transfer pricing has attracted the attention of tax administrations seeking a share of tax revenues around the world. While official transfer pricing rules were applied in only two countries in 1994, this number has increased to over 40 today. The risk of difficulties in transfer pricing practices for international companies is increasing rapidly. For companies that cannot meet the required standards in this regard, the additional taxes, interest and penalties to be created by the transfer pricing application carry a high financial cost risk. Global Solutions customers;

It provides benefits in the areas of avoiding double taxation, lowering the actual tax rate in advance, increasing the share value, and supporting information.

Our company, with its expert staff who have received special training and deep technical knowledge on the Transfer Pricing arrangement, which is considered very new for Turkey, and its international applications; To identify any financial risks that clients encounter due to the implementation of Transfer Pricing, and to minimize the identified risks; The company’s process and function analysis studies, comparison studies using special database programs, etc. Review of transfer pricing strategy, taking into account structural business changes in the market and changes in the firm’s function or organizational structure. If the head office established with a transfer pricing policy is abroad, the adaptation of these policies and defined methods to Turkey, Analysis of companies’ current transfer pricing practices, the process of reviewing documents, group transfer pricing practices, analysis, risk, taxpayers hesitations about who is there method “Annual Transfer Pricing Report”, which will be submitted to those who have passed, before the Revenue Administration of Support services and at the judicial stage regarding all kinds of transfer pricing disputes. It provides services in the field of preparation of documents.

Transfer Pricing and Disguised Capital Advisory

To protect tax revenues, Transfer Pricing rules are used more and more by the judicial authorities. Although these rules are fairly new, they spread quickly. Because countries that do not have a regulation on Transfer Pricing are subject to tax loss compared to other countries. In this context, transfer pricing has recently become a very important issue for both taxpayers and tax authorities. With the new Corporate Tax Law published in the Official Gazette dated 21 June 2006 and numbered 26205, Transfer Pricing methods have been put into practice in our country starting from 01.01.2007.

Failures in applying these methods both create a double taxation problem and bring serious tax penalties.

According to our transfer pricing legislation, there are two types of documentation requirements on the subject. The first of these is the Transfer Pricing Form, which must be submitted to the tax office attached to the annual corporate tax return; the other is the annual Transfer Pricing Report, which must be available from the date the declaration is filed. The purpose of the documentation/reporting is to prove that the taxpayers have made the said transactions in line with the arm’s length principle by preparing the information and documents showing the detailed calculations and analyses about the transfer pricing methods they use in their transactions with their related parties.

A comprehensive definition of a related party has been made in our transfer pricing legislation, and no criteria regarding capital or voting rights or dividend rights have been set in the determination of the related party. In addition, no threshold has been determined for the transaction amount in the documentation of transactions with related parties.

For these reasons, taxpayers are required to include all information about their related persons and transactions in the Transfer Pricing Form, and to explain and analyze all of their related transactions, for which they are responsible for preparing a report, in the Transfer Pricing Report.


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