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Taxpayers will use these preferences as of the end of the   Limitations on aggregated and
          provisional tax period when the economic asset is recorded
          into the inventory. The depreciation period and rate   anonymized CbCR statistics
          determined in this way cannot be changed in the following
          periods.                                            The Country-by-Country Report (CbCR) was implemented as
                                                              part of Action 13 of the OECD / G20 Base Erosion and Profit
          Penitence                                           Shifting (BEPS) project and the main objective of CbCR is to
                                                              help tax authorities identify and assess transfer pricing and
          One of the conditions for benefiting from the penitence   other high levels of risks associated with BEPS.
          provisions was that no tax inspection had been initiated for
          the taxpayer before the penitence application. Within the   In 2015, there was no consensus among members regarding
          scope of this provision, the taxpayer, which was inspected for   making the CBCRs public to protect the privacy of sensitive
          any tax type, could not benefit from the penitence provisions   information. Instead, MNEs submit CbCR in their respective
          for other tax types. With the new law, it is possible to file a   countries. Such an approach seems to be consistent
          tax return with penitence for a tax type different from the tax   given that sensitive data is treated this way in many other
          type related to the ongoing tax inspection.         instances.
          Irregularity fines                                  As a part of the BEPS 11  Action Plan, the authorities have
                                                              agreed to publish anonymous and aggregated CbCR statistics
          Irregularity fines and special irregularity fines was not in   on a regular basis to support the ongoing economic and
          scope of conciliation.  According to new law, irregularity   statistical analysis of MNEs and BEPS. The 2021 edition of
          fines and special irregularity fines exceeding TRY 5 thousand   the OECD Corporate Tax Statistics  published aggregated
          have been covered. On the other hand, 50% of discount rate   CbCR statistics, including CbCRs that are submitted in 38
          mentioned under article 376 of TPL in terms of irregularity   countries by approximately 6,000 multinational corporations
          fines and special irregularity fines not exceeding TRY 5   in 2017.
          thousand has been increased to 75%.
                                                              Anonymized and aggregated CbCR statistics provide crucial
          Tax inspections                                     information, such as:

          Tax inspection commencement minute is abrogated     •  CbCR data provides information on the global activities
          according to new law. In former practice, such tax inspection   of MNEs, with more detailed information than is available
          commencement minute, issued by the tax inspector, had   in other data sources such as consolidated financial
          been signed mutually before starting an inspection. Instead,   statements.
          tax inspection shall be deemed to be commenced upon the   •  CbCR data includes information on the number of
          notification of a letter, including the subject of inspection,   employees, income generated from related and unrelated
          to the taxpayer. This regulation shall be applicable as of the   parties, profit/loss before tax, accrued and paid taxes,
          beginning of July 2022.                               capital, retained earnings and tangible assets of MNEs.
                                                              •  Since the data includes all the global activities of the
          Additional time for CPA report submission and         relevant MNEs, it allows for the separate identification of
          penalty                                               domestic and international activities.
                                                              •  Information is reported by jurisdiction of tax residence and
          A special irregularity fine shall be imposed for the taxpayer   not jurisdiction of incorporation.
          in case of untimely submission of the report for cases to be   •  CbCR data provides cross-country information on the main
          benefited upon the submission of certification report issued   business activities of MNEs in different jurisdictions (e.g.,
          by certified public accountants (CPA). Such penalty shall be   production, sales, etc.).
          imposed as 5% of amount, not less than TRY 50 thousand
          and more than TRY 500 thousand, to be benefited upon the   Despite the advantages listed above, anonymized and
          submission of certification report.                 aggregated CbCR information also introduces some
                                                              limitations that affect the quality of the data of CbCR
          In addition, another regulation has been introduced with   statistics. Some of these limitations are summarized under
          the new law in terms of granting additional period to the   the headings below. 2
          taxpayer in case certification report cannot be submitted on
          a timely manner. Additional period shall be 60 days and if   1
          certification report cannot be submitted within such period,    OECD (2021), Corporate Tax Statistics: Third Edition, OECD, Paris,
          taxpayers shall not benefit from the right associated with
          certification.                                      database.htm.
                                                              2  OECD (2021), Important disclaimer regarding the limitations of
          This is the summary of the article published in the   the Country-by-Country report statistics, OECD, Paris,
          Ekonomist magazine’s issue 2021/24, dated 28.11.2021.

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