The Turkish Tax Administration Confirms Amount B Will Not Apply to Local Intermediary Transactions
In a recent official statement, the GİB (Gelir İdaresi Başkanlığı – Revenue Administration) of Turkey announced that the so-called “B Amount” of Pillar One, proposed under the OECD/G20 BEPS project, will not apply to transactions carried out by distributors and sales and commission agents operating in Turkey, even when acting on behalf of multinational companies.
This decision represents an essential message of tax certainty for economic operators in Turkey, especially for those involved in trading or agency activities.
What Is Pillar One Amount B?
Amount B constitutes part of the global tax reforms led by the OECD, which aim to standardize the remuneration of certain marketing functions performed by related parties by establishing a fixed profit margin for routine distribution and sales activities.
This approach aims to simplify the Transfer Pricing application, reduce tax controversies, and promote transparency between tax administrations and taxpayers.
Turkey Does Not Adopt Amount B
Conversely, according to the issued GİB’s statement, Turkey is not among the countries that have formally adopted Amount B, which implies that the proposed provisions will not be incorporated into its domestic legislation nor applicable in the auditing context.
Therefore, companies operating under distribution or intermediation schemes in Turkey must not apply this standardized remuneration method, as in OECD Inclusive Framework jurisdictions.
Effects on Multinational and Local Companies
This position adopted by the GİB allows multinational companies operating 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 Amount B margins.
Similarly, local taxpayers may experience greater tax predictability and reduced administrative burdens, as they are not subject to international standard rules that do not reflect the economic realities of their transactions.
Conclusion
The Amount B exclusion in Turkey underlines the sovereign approach thereof to the OECD recommendations, prioritizing the application of its own domestic tax rules. This decision is especially relevant in the current context of global tax reforms, where many jurisdictions are in the process of implementing new international guidelines.
Sources: Esin Attorney Partnership / Gelir Idaresí Baskanligi