| Tier 1 |
|---|
| Deloitte |
| EY |
| KPMG |
| PwC |
| Tier 2 |
| Centrum |
| Erdikler, Taxand Turkey |
| Esin Attorney Partnership |
| Mazars Denge |
| WTS Çelen |
| Tier 3 |
| BDO Denet |
| Pekin & Pekin |
Turkey's government suffered a failed coup attempt in July 2016, which correlated with a significant drop in FDI by close to 30% to $12 billion the same year.
"There is no doubt that we have seen a decrease in FDI, particularly from the Western world," said Erdal Ekinci, partner at Esin Attorney Partnership, a member of Baker McKenzie.
"There is still some movement, but not enough to meet the needs of the Turkish economy."
Turkey has made little progress with implementing the OECD's BEPS guidelines and the grey economy operating under the radar of tax authorities remains vast. The passing of constitutional reforms in April was expected to introduce sweeping structural reforms and more predictability for business. While there is a general consensus on wanting to simplify taxes, improve the investment climate and cut red tape in Turkey's notoriously complex bureaucracy, little has actually happened.
Ekinci said: "The Ministry of Finance and the government have not given priority to financial reforms. We, as a country, in a sense, are a bit slow."
Despite Turkey having been a member of the OECD since 1961 it is lagging behind in adopting international TP standards.
The country has not made any headway with BEPS Action 7 on permanent establishment status and drafts decrees pertaining to Actions 8-10 are still pending.
Despite the stagnant situation, Ekinci has an optimistic outlook on Turkey's future.
"More than half of our people still believe in European Union values. We do not have enough natural resources, therefore we need foreign [direct investment] inflow. We will do something to improve both our economic values and legal direction," Ekinci said.
In May 2017, a draft communication was published by the Council of Ministers, introducing three-tiered TP documentation including country-by-country reporting. The rules align with BEPS measures and have not yet been legislated but are expected to enter into force before the end of the year. The first round of CbCR will cover the financial year 2016.
The draft also refers to APAs, which have been extended to five years, up from the previous three. Applications for APA renewal are now more generous: six months prior to expiry compared to the previous nine months.
In the first half of 2017, Turkey became the 88th jurisdiction to sign the Multilateral Competent Authority Agreement for the Common Reporting Standard (CRS MCAA), committing to the automatic exchange of CbCR starting in September 2018.
Republic of Turkey Presidency of Revenue Administration Department of Taxpayer Services
Maliye Bakanlığı Gelir İdaresi Başkanlığı
Dikmen Cad. Merasim Sok. 06450 Çankaya / Ankara
Tel: +90 312 415 30 00
Fax: +90 312 415 28 21-22
Website: www.gib.gov.tr
(As of July 2017)
| Corporate income tax rate | 20% |
| Capital gains tax rate | 20% |
| Branch tax rate | 20/15% |
| Withholding tax |
|
| Dividends | 15% |
| Interest | |
| From repurchase (REPO) agreements | 15% |
| From deposit accounts | 10/12/13/15/18% |
| From loans | 0/10% |
| From Turkish government bonds and bills private sector bonds | 0/10% |
| From private sector bonds | |
| Issued in Turkey | 0/10% |
| Issued abroad | 0/3/7/10% |
| Royalties from patents, know how, etc | 20% |
| Professional fees | |
| Petroleum-exploration activities | 5% |
| Other activities | 20% |
| Progress billing on long term construction and repair contracts | 3% |
| Payments on financial leases | 1% |
| Real estate rental payments | 20% |
| Branch remittance tax | 15% |
| Net operating losses (years) |
|
| Carryback | 0 |
| Carryforward | 5 |
Source: Deloitte