"Transfer Pricing and Disguised Profit Distribution", which entered into force in 01.01.2007 in accordance with the provisions of Article 13 of the Corporate Tax Law No. 5520 and Article 41 of the Income Tax Law no. 5615, should be considered carefully by, in particular, multinational corporations and group companies.

Transfer pricing is the price applied by any business to different companies, divisions, branches, subsidiaries in the same business organization for the trading of goods and services and other commercial transactions.

In accordance with Turkish Tax Legislation, if corporations apply the cost and prices for the trades of goods or services with the related parties in contrary to arm's length principle, profits are deemed to be implicitly distributed in whole or part through transfer pricing and, thus, based on this profit, fined corporate tax/income tax, income tax withholding upon the profit distribution and lastly fined income tax for the shareholder who has received dividend may be assessed, as occasion requires.

Companies are required to prepare an annual transfer pricing report within certain limits and to fill the "Transfer Pricing, Controlled Foreign Institution and Concealed Capital Form" in the corporate tax returns.

DMF provides the services for preparation of such reports and forms that are required in accordance with the regulations on transfer pricing in the Tax Laws, as well as the preparation of special report and audit files requested by the management.