Transfer Pricing — Turkey (KVK Article 13)

What is Turkish transfer pricing?

Transfer Pricing (Transfer Fiyatlandırması) is the Turkish tax framework regulating prices charged between related parties (intra-group transactions), governed by 5520 sayılı Kurumlar Vergisi Kanunu (KVK) Madde 13 and the implementing Transfer Fiyatlandırması Yoluyla Örtülü Kazanç Dağıtımı Hakkında Karar. Turkey adopts the OECD arm’s-length principle: transactions between related parties must be priced as if conducted between independent parties. Non-compliant pricing results in “örtülü kazanç dağıtımı” (concealed profit distribution) with KVK Madde 11 disallowance plus penalties.

Related party definition (KVK m.13/2)

• Shareholding: direct or indirect 10%+ ownership.
• Management control: board representation, voting control.
• Family relationships: spouse, blood relatives up to third degree.
• Common shareholders: entities under common ultimate ownership.
• Tax havens (vergi cenneti): all transactions with low-tax jurisdictions deemed related-party regardless of actual relationship — extra documentation burden.

Accepted methods (OECD-aligned)

• Comparable Uncontrolled Price (KFY): direct market comparison.
• Resale Price Method (Yeniden Satış Fiyatı): for distribution transactions.
• Cost Plus Method (Maliyet Artı): for manufacturing/services.
• Profit Split Method (Kâr Bölüşüm): for highly integrated operations.
• Transactional Net Margin Method (İşlem Net Marj): most commonly used in practice.

Documentation requirements

• Master File: for groups exceeding consolidated revenue threshold.
• Local File: Turkish entity-specific documentation, prepared by Kurumlar Vergisi declaration deadline.
• Country-by-Country (CbC) Report: for multinational groups above EUR 750M threshold; submitted via GİB.
• Annual TP Form: attached to corporate tax declaration summarising intra-group transactions.