Türkiye’s Position under Public CbCR and the Implications of Its Continued Inclusion on the EU Gray List

Scope of the Public CbCR Regime

The Public Country-by-Country Reporting (Public CbCR) regime introduced under EU Directive 2021/2101 requires certain large multinational enterprise groups to publicly disclose selected financial and tax information on a jurisdiction-by-jurisdiction basis. The objective of the regime is to enhance tax transparency by making Country-by-Country Reports publicly accessible, either through filing with the relevant commercial registry or by publishing the information on the group's website.

The regime generally applies to multinational enterprise groups with consolidated revenue exceeding EUR 750 million in each of two consecutive financial years. Under the Directive, the reporting obligations apply in respect of financial years commencing on or after 22 June 2024 at the latest, although certain Member States have introduced earlier implementation dates.

Although the Public CbCR obligations introduced under EU Directive 2021/2101 primarily apply to EU-headquartered groups, reporting requirements may also arise for multinational groups whose ultimate parent entity is located outside the EU through medium-sized and large subsidiaries, as well as branches meeting certain conditions, operating within EU Member States.

While Public CbCR has not been implemented in Türkiye, Turkish-headquartered multinational groups with operations in the European Union may nevertheless become subject to Public CbCR reporting obligations through their EU subsidiaries or branches.

However, the European Union (EU) Economic and Financial Affairs Council (ECOFIN) updated its lists concerning non-cooperative jurisdictions for tax purposes on 9 October 2026. Under this update, Türkiye remains included in Annex II (the “Grey List”), which covers jurisdictions that have made certain tax-related commitments and are subject to ongoing monitoring regarding the implementation of those commitments.

Türkiye’s continued inclusion on the Grey List is particularly relevant for multinational enterprise groups within the scope of Public CbCR, as it may trigger separate reporting requirements in respect of Türkiye.

One of the key implications of Türkiye’s inclusion in Annex II is that information relating to operations in Türkiye may need to be disclosed on a standalone basis by in-scope groups.

As a result, rather than being aggregated with information relating to other non-EU jurisdictions, financial and tax information concerning a group’s activities in Türkiye may be required to be publicly disclosed separately for Türkiye.

Information to be Publicly Disclosed

Under the Public CbCR regime, the information required to be disclosed on a jurisdiction-by-jurisdiction basis generally includes:

• The nature of the group's activities
• Number of employees (full-time equivalent)
• Revenues
• Profit or loss before tax
• Accrued corporate income tax for the relevant financial year
• Corporate income tax paid on a cash basis
• Accumulated earnings

The public availability of this information enhances the comparability of multinational groups’ economic activities, profitability levels, and tax positions across different jurisdictions.

As noted above, Türkiye’s continued inclusion in Annex II of the EU list increases the importance of assessing Public CbCR obligations in relation to Türkiye. For in-scope multinational enterprise groups, information relating to their activities in Türkiye may need to be disclosed separately rather than being aggregated with data relating to other non-EU jurisdictions. Consequently, certain financial and tax information regarding operations in Türkiye may become publicly accessible on a standalone basis.
Impact on Turkish-Headquartered Groups and Their European Subsidiaries

For multinational enterprise groups with an ultimate parent entity resident in Türkiye and operations in EU Member States through subsidiaries or branches, Public CbCR obligations should be assessed at the group level.

In this context, the fact that the Turkish ultimate parent entity is not directly subject to EU legislation does not necessarily mean that the reporting requirements will not apply to the group. Subsidiaries or branches operating within the EU and falling within the scope of the regime may be responsible for publishing Public CbCR reports containing financial and tax information relating to the group as a whole.

Accordingly, the reporting requirements may extend beyond the activities of the relevant EU entity and include information relating to the Turkish ultimate parent entity as well as other group companies included within the scope of consolidation.

Furthermore, for multinational groups headquartered in Europe and operating in Türkiye through Turkish subsidiaries that fall within the scope of Public CbCR, it is advisable to assess the potential implications of the public disclosure of certain financial and tax information relating to their Turkish operations.

Reporting Timeline and Technical Requirements

Pursuant to the EU Public CbCR framework, reports must be made publicly available within 12 months from the balance sheet date of the relevant financial year.

Accordingly, for groups using the calendar year as their financial year, and subject to any specific local implementation requirements:

• The general deadline for reporting relating to the 2025 financial year is 31 December 2026;
• The general deadline for reporting relating to the 2026 financial year is 31 December 2027.

In addition, under Commission Implementing Regulation (EU) 2024/2952, a common reporting template and electronic reporting format apply to financial years commencing on or after 1 January 2025.

Accordingly, it is important to ensure that Public CbCR reports are prepared in compliance with the prescribed XHTML and Inline XBRL (iXBRL) format requirements.

Recommended Actions for Companies

In light of the Public CbCR requirements and Türkiye’s continued inclusion in Annex II of the EU list, Turkish-headquartered multinational enterprise groups are advised to consider the following actions in the context of their EU operations and existing reporting processes:

1. Perform a scope and obligation assessment: Assess whether the group falls within the scope of the Public CbCR regime by evaluating consolidated revenue thresholds, the size criteria applicable to EU subsidiaries, and the structure of EU branches under the relevant Member State legislation.

2. Determine reporting responsibilities and timelines: Identify which EU subsidiaries or branches are subject to reporting obligations and establish a coordinated group-wide approach to meeting applicable filing and publication deadlines.

3. Prepare Türkiye-specific data separately: Compile and consolidate financial and tax information relating to Turkish group entities on a country-by-country basis and ensure that such information is prepared in accordance with the required reporting format.

4. Perform consistency checks against existing CbCR and financial data: Compare the information to be disclosed under Public CbCR with existing Country-by-Country Reporting data, consolidated financial statements, and other relevant financial records, and assess whether any differences can be appropriately explained and supported.

5. Review transfer pricing policies: Evaluate whether publicly disclosed country-level information, including revenues, employee numbers, profitability, and tax data, is consistent with the group’s transfer pricing policies, functional and risk profiles, and arrangements relating to royalties, intra-group services, and financing transactions.

6. Establish an appropriate reporting infrastructure: Implement processes and controls for the preparation, validation, and public disclosure of reporting data, taking into account local requirements in the relevant EU jurisdictions as well as applicable electronic reporting format requirements.

Our Assessment

Türkiye’s continued inclusion on the EU gray list keeps the requirement to publicly disclose Turkey-specific financial and tax information in focus for multinational enterprise groups that fall within the scope of Public CbCR.

This is important not only from the perspective of complying with the reporting obligations of EU-based subsidiaries, but also in ensuring the accuracy, consistency, and explainability of the financial and tax information relating to the group’s activities in Türkiye.

As the information disclosed under Public CbCR will be publicly available, it may be scrutinized not only by tax authorities but also by investors, customers, suppliers, media organizations, and other stakeholders. Accordingly, it is important that the reported revenue, profitability, and tax information are consistent with the group’s economic activities and transfer pricing policies and can be clearly explained where necessary.

In particular, the fact that jurisdiction-by-jurisdiction profitability and tax information will become publicly accessible and more easily comparable may increase the importance of demonstrating the economic rationale underlying existing transfer pricing policies and the allocation of profits within the group.

Furthermore, Turkish-headed multinational enterprise groups operating in the EU should review their obligations under the Public CbCR rules and assess the nature and extent of any reporting and disclosure requirements that may arise in the jurisdictions where they operate.

Please do not hesitate to contact us should you require further information regarding this matter.

Başak Diclehan

KPMG, Global Tax Advisory Services Leader

Hanzade Yıldırım

KPMG, Senior Manager, Global Transfer Pricing Services