{"id":4177,"date":"2025-01-25T01:23:53","date_gmt":"2025-01-24T22:23:53","guid":{"rendered":"https:\/\/kilincadvisory.com\/?page_id=4177"},"modified":"2025-01-25T01:54:05","modified_gmt":"2025-01-24T22:54:05","slug":"the-turkish-revenue-administration-published-a-new-guide-on-the-mutual-agreement-procedure-under-double-taxation-treaties","status":"publish","type":"page","link":"https:\/\/kilincadvisory.com\/en\/gelir-idaresi-baskanligi-cifte-vergilendirmeyi-onleme-anlasmalarinda-yer-alan-karsilikli-anlasma-usulune-iliskin-yeni-rehberi-yayinladi\/","title":{"rendered":"The Turkish Revenue Administration Published a New Guide on the Mutual Agreement Procedure under Double Taxation Treaties"},"content":{"rendered":"<div data-elementor-type=\"wp-page\" data-elementor-id=\"4177\" class=\"elementor elementor-4177\" data-elementor-post-type=\"page\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1bc65d07 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1bc65d07\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-546278ca\" data-id=\"546278ca\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-71d4e8d elementor-widget elementor-widget-text-editor\" data-id=\"71d4e8d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The Revenue Administration has published an updated guide on the Mutual Agreement Procedure (MAP) application found in Double Taxation Treaties (DTTs). The revised guide, as an update on the issue in October 2019, was released on December 4, 2024, and applies to MAP requests filed on or after January 1, 2022.<\/p><p>As is widely known, the MAP application is typically provided for in Article 25 of many Double Taxation Treaties. It enables taxpayers to bring issues of double taxation\u2014without necessarily resorting to domestic remedies\u2014before the Competent Authorities (CAs) of the contracting states in which they reside or hold citizenship, or before the competent authority of another correspondent state. Essentially, it serves as a dispute resolution mechanism for international tax matters.<\/p><p>All of the Double Taxation Treaties to which T\u00fcrkiye is a party contain MAP provisions. To further enhance the effectiveness of MAP in, the \u201cMutual Agreement Procedure\u201d has also been codified in the fourth section of the Turkish Tax Procedural Law (Law No. 213).\n\nWhile the headings in the 2019 Guide remain largely in place, this new version offers more clarity where necessary, updates on the administrative issues to account for post-COVID-19 business practices, and reorganizes or expands certain headings. Efforts were also made to streamline and simplify the content.<\/p><p>Key Topics Addressed in the New Guide and Differences from the 2019 Guide:<\/p><p>1.\tIssues Subject to Interpretation or Application of DTTs\nMAPs are applied for resolving any double taxation of the taxpayer\u2019s income (i.e. tax base). It is stipulated that the MAP process can be initiated for the following cases:<\/p><ul><li>For resolving issues arising from the interpretation or application of the DTT.<\/li><li>For clarifying any term in the DTT that has not been clearly defined or fully understood.<\/li><\/ul><p>2.\tTypes of Meetings<\/p><p>3.\tFiling MAP Applications in T\u00fcrkiye\nMAP applications in T\u00fcrkiye should be submitted to the following address:\n \u2018\u2018Gelir \u0130daresi Ba\u015fkanl\u0131\u011f\u0131 Avrupa Birli\u011fi ve D\u0131\u015f \u0130li\u015fkiler Daire Ba\u015fkanl\u0131\u011f\u0131 \u00c7ifte Vergilendirmeyi \u00d6nleme Anla\u015fmalar\u0131 M\u00fcd\u00fcrl\u00fc\u011f\u00fc Devlet Mahallesi Merasim Caddesi No:9\/1 06450 \u00c7ankaya\/ANKARA\u2019\u2019\n\nThe guide notes that negotiations in MAP proceedings may be conducted in writing or verbally. This new version specifically adds references to face-to-face and online meetings.<\/p><p>4.\tExamples of Situations in Which Taxpayers Claim Taxation Contrary to DTTs\nUnder the relevant article on MAP, taxpayers may contend that they have been taxed inconsistently with the DTT provisions in various scenarios, including (but not limited to) the following:<\/p><ul><li>Determining the profit attributable to a permanent establishment (PE) under the \u201cBusiness Profits\u201d article of the DTT.<\/li><li>Resolving issues about whether an individual or entity is considered a resident of a particular contracting state.<\/li><li>Determining whether a PE arises under the \u201cPermanent Establishment\u201d article of the DTT in the other contracting state.<\/li><li>Addressing transfer pricing issues arising in transactions between associated enterprises under the \u201cAssociated Enterprises\u201d article of the DTT.<\/li><li>Addressing matters related to \u201cInterest,\u201d \u201cDividends,\u201d and \u201cRoyalties\u201d under the DTT, such as withholding taxes in the source state (where income is obtained) and any additional taxes imposed due to special relationships between payers and beneficiaries.<\/li><li>Determining whether income from services rendered in the other contracting state should be treated as \u201cEmployment Income\u201d under the relevant DTT article.<\/li><li>Cases where the taxpayer has been denied DTT benefits under the \u201cEntitlement to Benefits\u201d article of the DTT<\/li><\/ul><p>5.\tApplying for a Portion of a Tax Adjustment<\/p><p>The guide specifies that if the tax or tax base can be segmented, taxpayers may file a MAP request only for the portion that falls under the DTT\u2019s scope.<\/p><p>6.\tMultiple DTTs and Multiple Tax Periods<\/p><p>The new guide clarifies that taxpayers may file a single MAP request for interconnected tax issues involving more than one DTT (which means more than one corresponding state) \u2014 and that a single MAP request may also suffice for multiple tax years.<\/p><p>7.\tInformation and Documents Required for MAP Requests<\/p><p>The required documentation remains consistent with the 2019 guide. However, additional details are provided on information needed for transfer pricing cases.<\/p><p>8.\tDoes Submitting a MAP Request Prevent \u2018\u2018Local\u2019\u2019 Legal Action or Settlement?<\/p><p>Two new questions have been included:<\/p><ul><li>\u201cDoes a MAP request prevent initiating local legal proceedings?\u201d<\/li><li>\u201cDoes a MAP request prevent a local settlement application?\u201d<\/li><\/ul><p>9.\tAdvance Pricing Arrangements (APAs)\nNo changes have been made under the section on APAs.<\/p><p>10.\tOECD Website and the BEPS Action 14 Report\nReaders are directed to the OECD website for T\u00fcrkiye\u2019s MAP procedures country page, as well as the \u201cAction 14 Report\u201d (Making Dispute Resolution Mechanisms More Effective) under the Base Erosion and Profit Shifting (BEPS) initiative. This report requires countries to commit to a minimum standard for resolving disputes under DTTs promptly, effectively, and efficiently.\u00a0<\/p><p>The BEPS Action 14 Minimum Standard comprises 21 elements and 12 best practices that evaluate a jurisdiction\u2019s legal and administrative frameworks in this area. With the adoption of this standard, members of the BEPS Inclusive Framework have agreed to:\n\u25cf\tUndergo a peer review process to assess the standards\u2019 implementation.\n\u25cf\tReport MAP statistics using a newly developed MAP Statistics Reporting Framework.\u00a0<\/p><p>T\u00fcrkiye\u2019s Experience and Application of MAP<\/p><p>The Revenue Administration aims to expand and refine its expertise and practice in this area. Although T\u00fcrkiye is party to a large number of DTTs, practical experience regarding MAP\u2014and, in general, the interpretation or application of DTTs that requires consensus with another jurisdiction\u2014remains limited.\nT\u00fcrkiye\u2019s primary experience involves issuing certificates of residence and completing the requisite forms. So far, mutual agreements have been reached with Austria, Azerbaijan, Greece, Saudi Arabia, Germany, and Switzerland.\nOne practical obstacle is that, unlike certain European Union member states, T\u00fcrkiye is not party to any Arbitration Convention that would allow a contracting state to resolve a particular tax dispute via arbitration. Consequently, if a MAP request involving T\u00fcrkiye is not resolved within three years of negotiations, the absence of an Arbitration Agreement can cause the matter to remain unresolved.\nWhere MAP requests are concerned, the time needed to resolve disputes varies according to the complexity of each case. However, the Revenue Administration aims to keep this duration below two years wherever possible.\nConclusion\nMAP is a powerful international mechanism for preventing tax disputes and double taxation\u2014especially for cases that cannot be resolved through domestic channels. While it has not been used extensively in T\u00fcrkiye, the newly published guide represents a significant development. We encourage all taxpayers to remain aware of these developments and utilize MAP where appropriate.<\/p><p><strong>References:<\/strong><\/p><p>Turkish MAP Guide Link as follows:\u00a0<\/p><p><span><a href=\"https:\/\/www.gib.gov.tr\/sites\/default\/files\/fileadmin\/CifteVergilendirme\/KAU_Kilavuzu2024.pdf\">https:\/\/www.gib.gov.tr\/sites\/default\/files\/fileadmin\/CifteVergilendirme\/KAU_Kilavuzu2024.pdf<\/a><\/span><\/p><p>Turkish MAP Guide Link (In English) as follows:<\/p><p><span><a href=\"https:\/\/www.gib.gov.tr\/sites\/default\/files\/fileadmin\/CifteVergilendirme\/MAP_Guidelines2024.pdf\">https:\/\/www.gib.gov.tr\/sites\/default\/files\/fileadmin\/CifteVergilendirme\/MAP_Guidelines2024.pdf<\/a><\/span><\/p><p>Dispute Resolution Profile of T\u00fcrkiye:<\/p><p><span><a href=\"https:\/\/www.oecd.org\/content\/dam\/oecd\/en\/topics\/policy-sub-issues\/dispute-resolution\/turkiye-dispute-resolution-profile.pdf\">https:\/\/www.oecd.org\/content\/dam\/oecd\/en\/topics\/policy-sub-issues\/dispute-resolution\/turkiye-dispute-resolution-profile.pdf<\/a><\/span><\/p><p>OECD Report on Action 14:<\/p><p><span><a href=\"https:\/\/www.oecd.org\/en\/publications\/making-dispute-resolution-mechanisms-more-effective-action-14-2015-final-report_9789264241633-en.html\">https:\/\/www.oecd.org\/en\/publications\/making-dispute-resolution-mechanisms-more-effective-action-14-2015-final-report_9789264241633-en.html<\/a><\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>En son Ekim 2019\u2019da yay\u0131nlanan \u00c7ifte Vergilendirmeyi \u00d6nleme Anla\u015fmalar\u0131nda yer alan Kar\u015f\u0131l\u0131kl\u0131 Anla\u015fma Usul\u00fcne \u0130li\u015fkin Yenilenen rehber 1 Ocak 2022 tarihinden itibaren yap\u0131lan ba\u015fvurular i\u00e7in ge\u00e7erli olmak \u00fczere 4 Aral\u0131k 2024\u2019te yay\u0131nlanm\u0131\u015ft\u0131r. Bilindi\u011fi \u00fczere, Kar\u015f\u0131l\u0131kl\u0131 Anla\u015fma Usul\u00fc (KAU), genellikle \u00c7ifte Vergilendirmeyi \u00d6nleme Anla\u015fmalar\u0131n\u0131n (\u00c7V\u00d6A) 25\u2019inci maddesinde yer alan, m\u00fckelleflerin olu\u015fan \u00e7ifte vergilendirme sorunlar\u0131n\u0131 ulusal \u00e7\u00f6z\u00fcm [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"inline_featured_image":false,"footnotes":""},"class_list":["post-4177","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/pages\/4177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/comments?post=4177"}],"version-history":[{"count":10,"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/pages\/4177\/revisions"}],"predecessor-version":[{"id":4191,"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/pages\/4177\/revisions\/4191"}],"wp:attachment":[{"href":"https:\/\/kilincadvisory.com\/en\/wp-json\/wp\/v2\/media?parent=4177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}