Turkish tax authorities confirm that they will not apply Amount B in local intermediary transactions
In a recent official statement, the Turkish Revenue Administration (GIB) announced that it will not apply the so-called “Amount B” of Pillar One, proposed within the framework of the OECD and G20 BEPS project, to transactions carried out by distributors, sales agents and commission agents operating in Turkey, even when acting on behalf of multinational companies.
This decision sends an important message of tax certainty to economic operators in Turkey, especially those involved in marketing or representation activities.
What is Pillar One Amount B?
Amount B is part of the global tax reforms led by the OECD, which aims to standardize the remuneration of certain marketing functions performed by related parties, establishing a fixed profit margin for routine distribution and sales activities.
This approach seeks to simplify the application of transfer pricing, reduce tax disputes and promote transparency between tax administrations and taxpayers.
Turkey does not adopt Amount B
However, according to the statement issued by the GIB, Turkey is not among the countries that have formally adopted Amount B, which means that the proposed provisions will not be incorporated into its domestic legislation, nor applicable in the context of audits.
Therefore, companies operating under distribution or intermediation schemes in Turkey will not be obliged to apply this standardized remuneration method, as is the case in jurisdictions that are part of the OECD Inclusive Framework.
Impact for multinational and local companies
This position adopted by the Turkish tax administration allows multinational companies with operations in Turkey to maintain their current Transfer Pricing policies based on a specific functional and economic analysis, without being forced to modify their methodology to align with the margins of Amount B.
Likewise, local taxpayers can have greater fiscal predictability and a lower administrative burden, as they are not subject to international standard rules that may not reflect the economic reality of their operations.
Conclusion
The exclusion of Amount B in Turkey highlights the country’s sovereign approach to OECD recommendations, prioritizing the application of its own domestic tax rules. This decision is particularly relevant in the current context of global tax reforms, where many jurisdictions are in the process of implementing new international guidelines.
Sources: