20.12.2022/80
The Deadline for Submitting the Country-by-Country Report for the 2021 Accounting Period is December 31, 2022
The 4th Series No. Communiqué on Changes to the General Communiqué No. 1 on Transfer Pricing and Hidden Profit Distribution, published on 01.09.2020, includes provisions on the preparation and submission of the country-by-country report.
These provisions are contained in Article 5, Section 7.4 titled ‘Country-by-Country Report’ of the Communiqué. The multinational enterprise group’s ultimate parent entity or agent entity in Turkey, whose consolidated group revenue in the previous accounting period is 750 million Euros or more, is required to prepare the country-by-country report and submit it electronically to the Revenue Administration by the end of the twelfth month following the reporting period. If the consolidated financial statements are prepared in a currency other than Euros, the exchange rate used for calculating the 750 million Euro threshold will be the average exchange rate announced by the Central Bank of the Republic of Turkey for the previous accounting period.
However, if the ultimate parent or agent entity is not located in Turkey, the group’s domestic entity (if the multinational group has more than one entity in Turkey, one entity on behalf of others) will submit the country-by-country report electronically to the Administration if one of the following conditions is met:
a) There is no obligation for country-by-country reporting in the country of residence of the ultimate parent or agent entity,
b) There is an obligation for country-by-country reporting in the country of residence of the ultimate parent or agent entity, and there is an international agreement between the Administration and the tax authority of the country of residence of the ultimate parent or agent entity, but no active agreement on sharing country-by-country report information,
c) There is an obligation for country-by-country reporting in the country of residence of the ultimate parent or agent entity, and there is an international agreement and an agreement on the exchange of country-by-country reports between the Administration and the country’s tax authority, but there is a systemic failure in the information sharing process.
Even if the country-by-country report is made in another country under the “agent entity” status or based on local reporting rules, it will still be prepared and submitted by the ultimate parent entity in Turkey to the Administration.
The country-by-country report must be prepared by the end of the twelfth month following the reporting period and submitted electronically to the Administration. For the 2021 accounting period, it must be submitted by December 31, 2022. If there is a special accounting period, it must be submitted by the end of the twelfth month following the end of that special period.
There are no exemptions for country-by-country reporting. Multinational groups exceeding the threshold for the reporting period are required to prepare the country-by-country report.
The tables related to the country-by-country report are included in Annex 6 of the aforementioned Communiqué. The tables, organized in accordance with the content, should be filled out following the guidelines provided in the Revenue Administration’s Information Transfer System (BTRANS) application and submitted electronically in XML format. To submit, taxpayers must use the BTRANS application available on the Revenue Administration’s website: www.gib.gov.tr. Taxpayers need to request a user code, password, and PIN from the Application and Data Management Department of the Administration by submitting a signed petition. The petition should specify the purpose of the data submission, so that the appropriate definitions can be made according to the data format for the user code.
You can read our related blog post here.
You can access the relevant Communiqué here.
Sincerely,
BİLGENER
