Subject: Declaration regarding  Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports (CbC MCAA) has been approved and published in the repeated Official Gazette dated October 1, 2020. In this regard; Turkey is considered a signatory of the CbC MCAA as  of December 30, 2019.

Summary

The CbC MCAA has been published in the Official Gazette dated October 1,2020 with approval by the Presidential Decree No. 3038. In this regard; Turkey is considered as a signatory party of the CbC MCAA as of December 30, 2019.

Accordingly, it will be ensured that the Country-by-Country Reports (CbCR) is exchanged between the competent authorities of the contracting countries.

After the signing and completion of the necessary activation procedures regarding the CbC MCAA, Turkish resident entities which are part of foreign headquarter Multinational Enterprises (MNEs) will not be required to submit the CbCR of the to the Administration. In case of the not  completing the required activations until the end of December, the mentioned MNEs will be required to locally file CBCR to the Administration. We will share the developments in this regard simultaneously.

Hereby, we would like to point out that the CbCR Notification must be made until October 30, 2020; and that taxpayers who will submit the CbCR Notification Form must obtain a user code and password from the registered tax offices.

Descriptions

The CbC MCAA has been published in the repeated Official Gazette dated October 1,2020 with approval by the Presidential Decree No. 3038. In this regard; Turkey is considered as a signatory of the CbC MCAA as from December 30, 2019.

Through the CbC MCAA, tax jurisdictions desire to increase tax transparency in order to assess how multinational businesses structure their activities and view to assessing high-level transfer pricing risks and other base erosion and profit shifting risks as well as economic and statistical analysis.

It has been stated that the exchange of information for tax purposes, including automatic exchange of information, is permitted and that Jurisdictions are empowered to decide the scope and format of such automatic information exchange.

It was stated that although the mentioned automatic exchange of information will take place between two Competent Authorities, bilateral or multilateral exchange of information can also be mutually agreed.

In this context, it was stated that the tax authorities commits to discuss with aim of resolving cases with economic consequences, including individual businesses.

After the signing and completion of the necessary activation procedures regarding the CbC MCAA, Turkish resident entities which are part of foreign headquarter Multinational Enterprises (MNEs) will not be required to submit the CbCR to the Administration. In case of not completing the required activations until the end of December, the mentioned MNEs’ local filing obligations to the Administration will continue. We will share the developments in this regard simultaneously.

In addition, there is a CbCR Notification obligation for the taxpayers within the scope. As per the explanations in the General Communiqué on Disguised Profit Distribution via Transfer Pricing, serial no. 4. " Notification Form Relating to Country by Country Reporting", which is among the documentation obligations of transfer pricing, has been opened for use in the "Internet Tax Office> Other Notifications and Information Entries" field.

For detailed information on the subject, you can reach the related Decree from the link below.

https://www.resmigazete.gov.tr/eskiler/2020/10/20201001M1-2.pdf

Regards,