Turkey was a founding member of the OECD and it is generally a quick adopter of any recommendation coming from the organisation. The jurisdiction has moved to implement BEPS with a number of the action points having already been incorporated into its tax legislation.
Turkey has also moved to implement country-by-country reporting (CbCR) requirements. For large multinational groups, these include a requirement to produce a master and local file to be submitted to the Turkish revenue services.
The focus in Turkey when implementing the OECD's BEPS proposals has been on internet-based goods and services, with the reforms being designed to strengthen the Turkish state's claim that certain business activities constitute a permanent establishment in the jurisdiction with a view to the broadening of the tax base in the jurisdiction.
What is not yet clear, some advisers have said, is how aggressive the Turkish tax authorities will initially be in auditing taxpayers. Informal discussions between businesses and the authorities are taking place regarding how quickly companies will be expected to be fully compliant given the rapid implementation of certain measures.
On July 1 2016 new VAT rules were introduced that require internet service providers, banks, internet advertising agencies, as well as cargo and logistics service companies to submit monthly VAT reports on the transactions that they conduct online, an unwelcome addition to in-house tax departments' compliance duties
Transfer pricing rules in Turkey have also been updated to include concepts such as "location savings and other market features", "assembled workforce" and "group synergies" that will now have to be taken into account when conducting a transfer pricing comparability analyses. The government is also expected to introduce new definitions of what constitutes a work place and a permanent establishment to update the tax code to cover online commercial activities.
Furthermore, new legislation expected to be added to the Turkish Tax Procedures Code will shift the burden of proof from the state on to the taxpayer in establishing whether the taxpayer is engaged in "aggressive tax planning". The amendments listed above appear to be designed to ensure that revenue generated by Turkish internet users is taxable in Turkey no matter where the provider of the product is ultimately located.
Given the compliance burden that measures such as the new VAT reporting requirements, CbCR and the shifting of the burden of proof will place on taxpayers, the authorities may allow the reforms time to bed in before they begin aggressively auditing to ensure the success of the new measures. But as in all jurisdictions that have been moving to implement the BEPS provisions, the changes represent a significant break with the past and risk being initially uncomfortable for taxpayers as they adjust to a post-BEPS tax environment.
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|Corporate Income Tax||20%|
|Capital Gains Tax||20%|
|Net Operating Losses (years)|
|Interest from repurchase (REPO) agreements||15%|
|Interest from deposit accounts||15%||12%||13%||15/18|
|Interest from loans||0%||10%|
|Interest from Turkish government bonds and bills private sector bonds||0%||10%|
|Interest from private sector bonds issued in Turkey||0%||10%|
|Interest from private sector bonds issued abroad||0%||3%||7%||10|
|Royalties from, for example, patents, know-how||20%|
|Professional fees - Petroleum-exploration activities||5%|
|Professional fees - Other activities||20%|
|Progress billing on long term construction and repair contracts||3%|
|Payments on financial leases||1%|
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Baker Tilly Güreli's tax department consists of a combination of lawyers, auditors and accountants with wide expertise in domestic and international tax advisory. With eight offices across the country, the team offer integrated support in a wide range of tax services including international tax planning, VAT planning and returns, transfer pricing, tax analysis, risk assessment, assistance with business tax activities as well as the evaluation of licenses, royalties and other international agreements.
BDO Denet's tax department is able to assist clients on an array of tax and legal services with the aim to support corporate clients on all tax aspects of inbound and outbound business activities. The team comprises a wide range of skills which covers full certification services, compliance, due diligence, VAT, transfer pricing, tax disputes and audit supervision.
The tax practice at Deloitte Turkey is headed by Ahmet Cangöz. The team offers a wide range of tax services to private and corporate clients both domestically and internationally. Cangöz joined the firm as a tax partner in 2007 and has extensive experience in tax as the former chief tax auditor for the Ministry of Finance.
The large team of 18 partners and 313 professionals comprises legal, tax and audit specialists who advice clients on domestic and international transactions, M&A, corporate tax, transfer pricing, compliance, tax litigation and controversy.
Another significant partner is Güler Hülya Yilmaz, who has more than 25 years of professional experience and leads the cross-border tax service lines covering international tax, transfer pricing and M&A. Erdal Dinçtürk heads the business process solutions and indirect tax groups and Gülfer Irmak is in charge of global employer services.
Deloitte Turkey is celebrated its 30th anniversary in 2016.
Saban Erdikler is based in Turkey, supervising all tax activities at Erdikler, Taxand Turkey. He has more than 35 years of experience in local and international tax and has a wealth of expertise in issues related to investments, banking, commercial law, practices, labour relations and exchange control regulations.
The team offers a variety of tax services in corporate and individual tax, indirect tax, M&A, real estate taxation, transfer pricing, business restructuring and dispute resolution.
Ates Konca is EY's international tax leader in Turkey, and has expertise in business tax, cross-border M&A and transfer pricing. The team of professionals assists clients on comprehensive tax and legal matters with an array of knowledge and expertise in Turkish and international tax. Key industries include pharmaceuticals, telecommunications, automotive, electronics, technology and consumer goods.
The dedicated tax team at Grant Thornton provides a range of services such as reporting assistance, critical tax analysis and modification, compliance, corporate and individual taxation to help clients from all backgrounds align their activities with current developments in the global tax market.
The Turkish tax practice also assists with matters relating to tax audits, R&D, due diligence and tax training.
KPMG Turkey's tax practice is led by Abdulkadir Kahraman and comprises vastly experienced tax, legal and financial professionals with the ability to offer full tax support to domestic and international clients. The team specializes in the energy, financial services, pharmaceuticals, telecommunications and logistics sectors.
Kahraman has a wealth of expertise in several areas of international tax, particularly within the financial services. He is also experienced in transfer pricing, tax controversy, capital markets and local tax issues.
Mazars Denge's tax team demonstrates extensive understanding of Turkish and international tax planning, corporate tax, VAT planning and customs, transfer pricing, R&D, tax disputes and audits. The head of the department is Leon Coskun, who is also the firm's chairman and oversees the large full-service team. The practice is particularly experienced in the automotive, construction, textile, finance/insurance and transportation industries.
Bülent Özdirekcan supervises all tax activities at Özdirekcan Bilgiç Dündar Avukatlik Ortakligi and has years of experience advising major local and foreign corporations in their investments in Turkey. He specialises in corporate, M&A and restructuring advice, particularly within the automotive, banking and insurance, energy and real estate sectors.
The firm provides comprehensive tax advice to private clients, multinationals and public entities and has expertise within the banking and financial services industry. The tax team also assists clients with tax litigation, joint ventures, and fund management, tax aspects of corporate restructuring, privatisations, project financing and capital markets.
Firat Yalçin leads the tax practice at Pekin & Pekin, which assists clients on a range of tax matters such as M&A, tax disputes, tax audits, court negotiations, cross-border transactions, financing and compliance.
It supports clients from all industries, but is particularly proficient in the banking and finance, automotive, energy, industrial manufacturing and services, consumer products and retail sectors.
Yalçin formerly worked for EY, where he was a tax manager and lawyer. He has an array of experience in tax and corporate structuring of cross-border transactions, particularly related to M&A.
The Turkish tax team at PwC has an in-depth understanding of Turkish and international tax and provides all-inclusive advise to its clients through close analysis of corporate tax structures and a thorough understanding of tax requirements across a range of industries.
Zeki Gunduz is the head of the tax practice and has expertise in the retail and consumer products, automotive, energy and mining, insurance and financial services, and pharmaceuticals and healthcare industries.
The wide scope tax department at Sigma Yeminli Nali Müsavirlik offers tax and accounting support to Turkish and international clients across a range of industries. Professionals at the firm assist clients operating in the textiles, pharmaceuticals, energy, tourism, advertising, telecommunications, airport services, real estate, construction and retail.
The firm is particularly experienced advising clients on tax matters related to banking and finance, special investment funds, real estate and capital markets.
White & Case's tax team offers a range of tax services. It assists clients with a range of tax issues such as international tax planning, transfer pricing, joint ventures, M&A, spin-offs, individual tax and estate planning, tax controversy and litigation.
The firm covers a wide range of industries including real estate, media and communications, pharmaceuticals and healthcare, hospitality, construction, transportation, chemical production, energy, financial services, technology and insurance.
Arif Çelen is the head of tax at WTS & Çelen, leading a team of two other partners and 17 professionals. It supports Turkish and international clients on a broad spectrum of tax matters including tax planning, structuring, M&A, individual tax assistance and tax disputes.
The team focuses on assisting domestic and foreign investors operating in Turkey with compliance, offering assistance in corporate tax and income tax, regulations, VAT, double taxation negotiations, stamp duty and foreign exchange regulations.
It is particularly strong in the tourism, pharmaceuticals, construction, international trade, mobile technology and telecommunications industry.
YükselKarkinKüçük comprises a team of resourceful professionals with diverse abilities in tax advisory including transfer pricing, international tax planning, tax analysis, risk assessment and litigation.
The team is experienced in Turkish and international tax and has a wealth of expertise in pharmaceuticals, food and agriculture, automotive, real estate, energy, automotive, production, marketing, venture capital, banking and insurance.