Will Turkey implement Pillar 2 rules?

Yayınlanma Tarihi: 09 Mayıs 2024

Will Turkey implement Pillar 2 rules?

As known, BEPS 2.0  proposes a two pillar solution mechanism which consist of Pillar 1 and Pillar 2 as a part of OECD Base Erosion and Profit Shifting  project. There is still not an international  consensus on the implementation of Pillar 1 which will only effect  limited number of MNEs which have a consolidated revenue greater than 20 bil Euro and a profit before tax margin higher than 10 % are . On the other hand, GloBE rules of Pillar 2 which designs global minimum corporation tax are now in force in many jurisdictions effective from 2024. Multinational enterprises (MNEs)  which have consolidated revenue greater than 750 mil Euro at least in 2 years over 4 last years will be within the scope of Pillar 2. Domestic or Foreign Headquartered MNEs will be both under scope of Pillar 2, while the adoption of  the some rules might be different. As a general rule, in case the Group is already subject to Country by Country (CbC) requirements, then  the Group might be subject to Pillar 2 rules.  As a sum, in case the consolidated group revenue is greater than 750 mil euro for 2 years over 4 years, then your company is subject to Pillar 2.

While many jurisdictions have introduced draft rules or implemented new GloBE rules; Türkiye despite working heavily on the GloBE rules has not yet announced them. On the other hand, we are expecting Türkiye will publish draft rules sooner and  the rules will be mostly in line with GloBE rules. Thus, before the release of the rules, we advise to be prepared for Pillar 2 rules. Please kindly see the main considerations in relation to Turkish position to GloBE rules;

  • It is expected that Türkiye will adopt GloBE model rules including Qualifying Domestic top up tax (QMDTT)  to be implemented to FY 2024  year income.
  • The nominal corporate tax rate is 25 % in Türkiye, however due to  tax incentives, the effective tax rate (ETR) of Turkish entities might be under 15 %. Therefore, it is necessary to analyse  Turkey’s jurisdictional ETR.
  • For Foreign Investments which are subject to Pillar 2 rules; Transitional CbC Safe Harbour calculations should be made for Turkish jurisdiction to identify if Turkey is a risky jurisdiction in terms of top up tax. In case top up tax will be calculated, please kindly note that Turkiye is expected to introduce QMDTT and this QMDTT would be credited against top up tax.
  • Turkish MNEs which are under scope should analyse each jurisdiction they operate, identify risky jurisdictions where top up tax might be due and follow up QMDTT and other local implementation of each jurisdictions.


As a summary, MNEs which are under scope of Pillar 2 and operating in Türkiye should closely monitor the possible developments in Türkiye. Please also kindly note that since the draft rules are not announced yet, the above explanations are based on our general observations and might be subject to change.