Transfer pricing became even more important this year after Turkey signed its first unilateral advanced pricing agreement just over a year ago.
Announced in July 2011 by the Turkish Revenue Administration (TRA), this move has been described by lawyers ...
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Transfer pricing became even more important this year after Turkey signed its first unilateral advanced pricing agreement just over a year ago.
Announced in July 2011 by the Turkish Revenue Administration (TRA), this move has been described by lawyers as a significant step towards encouraging taxpayer compliance and avoiding transfer pricing disputes.
The regulations outline that companies with a signed APA are not required to prepare annual transfer pricing reports for transactions that are covered by the APA, but must prepare annual APA reports.
"I believe that transfer pricing activity will increase in coming months because tax authorities have started to ask for transfer pricing reports from companies. The government established a new transfer pricing department which is starting to work now," explained Leon Coskun, a partner of Mazars Denge.
The Turkish market has also seen an increase in M&A activity this year. "We see much more M&A transactions in the energy sector," said Bülent Özdirekcan, a partner at Gide Loyrette Nouel.
Other change includes the introduction of a new commercial court in July 2012. According to the new regulation in this court, starting 01 July, joint stock companies can have just one share holder. "This is one of the changes that is very important," said Coskun, adding "Prior to this, the obligation was for at least five shareholders. This change means that it will be possible to settle a transfer company with just one shareholder."
Changes to Turkish tax legislation have been piecemeal rather than comprehensive. An amendment to accounting regulations means that the limited liability companies' accounts must now be validated by audited reports. This change will align the system with international standards.
"All companies are obliged to put in their website their balance sheet, their revenue account and also the audit report and keep it for a certain amount of time. They have to publish on website decisions of the board of directors. This is one of the major changes," said Coskun.
And from May 2012 foreign investors will now be able to buy up to 30 hectares of real estate in Turkey.
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