In Turkey, the concept of ‘disguised profit’ that existed in Corporate Tax Law No. 5422 has been re-defined by Corporate Tax Law No. 5520, clause 13, under the name ‘Disguised profit distribution by means of transfer pricing,’ thus referring to OECD regulations, and by Law No. 5615. Similar provisions have been added to the Income Tax Law, with clause 41.
As a result of these changes, ‘Transfer Pricing Application’ became effective as of 01.01.2007.
With the above-mentioned regulations, if entities trade products or services with related parties over set values and prices, in contradiction to the arm’s length principle, those earnings, totally or partially, will be considered disguised profit distribution by means of transfer pricing.
In this frame, Murat Ürkmez YMM Office provides legal arrangements, preparations for taxpayers and transfer pricing services.