Limitations Regarding Financing Expenses in Turkish Tax System

VAT deduction in transfer pricing assessments: One of the issues that caused disputes in the previous years regarding the transfer pricing application was the deduction of the VAT paid during the purchases from non-resident related parties, when it was determined that the principles of transfer pricing were not complied with these purchases. The tax administration was of the opinion that VAT, which was paid to the customs administration or paid on reverse charge basis during the relevant purchases, cannot be considered as deductible VAT. However, within the framework of the amendment made in 2016 in the VAT General Application Communiqué, there is no need to make any adjustments

WHT on interests paid abroad: Similar to the thin capital application,…