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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.
th
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
1
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 https://www.oecd.org/tax/tax-policy/corporate-tax-statistics-
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. https://www.oecd.org/tax/tax-policy/anonymised-and-aggregated-
cbcr-statistics-disclaimer.pdf

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