On March 7, 2025, the Turkish Revenue Administration (TRA) announced that Turkey will not adopt Amount B of Pillar One for transactions involving distributors, sales agents, and commissionaires operating within the country. This decision preserves Türkiye’s current approach to transfer pricing and has practical implications for multinational enterprises (MNEs) with Turkish operations.
What is Amount B of Pillar One?
Amount B is part of the OECD/G20 Inclusive Framework’s Two-Pillar Solution, which addresses the tax challenges created by the digitalization of the global economy.
While Pillar One mainly reallocates taxing rights over large multinational groups, Amount B introduces a simplified and standardized transfer pricing method for baseline marketing and distribution activities. Specifically, it targets “routine” distribution functions, such as those carried out by:
- Limited-risk distributors,
- Commissionaires,
- Sales agents.
The main objectives of Amount B are to:
- Streamline the application of the arm’s length principle,
- Reduce disputes between taxpayers and tax administrations,
- Simplify compliance, especially in jurisdictions with limited capacity.
The OECD released its final report on Amount B on February 19, 2024, followed by an administrative guidance note in June 2024 and a Model Competent Authority Agreement (CAA) in September 2024. These resources were later consolidated in February 2025.
Turkey’s Stance: No Adoption of Amount B
According to the official communication from the Turkish Revenue Administration, Turkey will not apply Amount B to domestic transactions involving qualifying distribution and intermediary activities.
This means that existing Turkish transfer pricing regulations—which are based on the OECD Transfer Pricing Guidelines—will remain the standard. These rules require companies to:
- Perform detailed functional and risk analyses,
- Use comparability assessments,
- Apply traditional benchmarking studies to determine arm’s length pricing.
In essence, Turkey has opted to retain full discretion over how such transactions are evaluated, rather than apply a standardized return or fixed margin as envisioned under Amount B.
Impact on Multinational Enterprises (MNEs)
For MNEs with related-party distribution, sales agency, or commissionaire structures within Turkey, the TRA’s position means:
- No access to simplified pricing or documentation relief under Amount B,
- A continued need for traditional transfer pricing documentation,
- Possible audit exposure based on Türkiye’s specific transfer pricing practices.
MNEs headquartered in Türkiye, with intermediary operations abroad, will also need to assess the international landscape. If other countries choose to adopt Amount B, there could be mismatches in how the same transaction is treated across jurisdictions, potentially increasing double taxation risks or the need for dispute resolution.
What Should Companies Do Next?
Given the mixed implementation of Amount B across jurisdictions, MNEs should consider:
- Mapping where Amount B applies across their global operations,
- Reviewing distribution structures and contracts to ensure compliance under different regimes,
- Enhancing transfer pricing documentation to meet both Turkey’s rules and those of adopting countries,
- Monitoring bilateral agreements and competent authority updates, especially where tax treaties may influence cross-border application.
Conclusion
Turkey’s decision to exclude Amount B from its domestic tax framework emphasizes the importance of localized compliance. As other jurisdictions begin implementing the OECD’s simplified model, inconsistencies in transfer pricing policies may become more common. For this reason, multinational companies should remain agile, review their current structures, and work with experts to navigate regulatory divergence effectively.
Staying informed, using technology for real-time analysis, and seeking professional guidance will be key to mitigating risks and ensuring continued tax compliance in Türkiye and beyond.
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