Submission Deadline of First Notification of Country-by-Country Reporting Extended
The Presidential Decree No. 2151, published in the Official Gazette dated February 25, 2020 and No. 31050, and which entered into force on the same date (“Presidential Decree”) amended the Council of Ministers’ Decree No. 2007/12888 on Disguised Profit Distribution through Transfer Pricing, whereby new transfer pricing documentation rules were introduced.
It was stipulated in the aforementioned Presidential Decree that the members of multinational group of enterprises in scope would be obligated to notify the Tax Administration as to whether they were in the position of an ultimate parent company entity or a surrogate entity; which entity would be reporting on behalf of the group; and any relevant information about the accounting period, by the end of the sixth month following the publication of the Presidential Decree (end of August 2020) for the first country-by-country report. The Tax Administration is authorized to postpone the periods set forth in the provision for up to six months.
Pursuant to this authorization, the Tax Administration resolved the details for the notification form for the country-by-country report in the General Communiqué on Disguised Profit Distribution through Transfer Pricing (Serial No. 4), which was published in the Official Gazette dated September 1, 2020 and No. 31231 (“New Communiqué”).
The New Communiqué states the notification form for the country-by-country report must be submitted by 23:59 on October 30, 2020, to be exclusive to the accounting period of 2019 and the special accounting period commencing as of January 1, 2019, in accordance with the contents of the attachment of the General Communiqué on Disguised Profit Distribution through Transfer Pricing (Serial No. 1) (“General Communiqué“) (Annex-5) and the explanations provided in the online tax office, and must be submitted electronically to the online tax office.
In subsequent years, the notification form for country-by-country reporting must be submitted to the Tax Administration by the end of June of each year. In addition, country-by-country report for the 2019 accounting period will be submitted to the Tax Administration by 31.12.2020.
Other Regulations under the New Communiqué
The other regulation alteration under the New Communiqué include:
In order not to provoke any penalties regarding the new transfer pricing documentation obligations and to benefit from the 50% discount on tax loss penalties in a possible tax assessment, the detailed explanations and examples provided in the New Communiqué in this regard should be meticulously analyzed.