New Developments
On 7 March 2025, the Turkish Revenue Administration announced on its website that Pillar One – Amount B will not apply to the transactions of distributors, sales agents and commissioners operating in Türkiye.
What is Pillar One – Amount B?
Amount B was developed under the first pillar of the Two-Pillar Solution for the taxation of the digital economy, created by the Inclusive Framework (IF) under the Base Erosion and Profit Shifting (BEPS) project conducted by the Organization for Economic Co-operation and Development (OECD) and the G20.
Amount B aims to create a more predictable and standardized transfer pricing mechanism for certain subsidiaries of multinational enterprises in low-capacity jurisdictions where it is difficult to access sufficient resources and data. This mechanism is intended to prevent transfer pricing disputes between tax administrations and taxpayers. The implementation of Amount B is planned through amendments to the OECD Transfer Pricing Guidelines and the adoption of these changes by jurisdictions. In this context, multinational enterprises operating in countries that adopt Amount B will be able to benefit from the simplified transfer pricing mechanism introduced for distributors, sales agents and commissioners performing sales and marketing functions.
The Pillar One – Amount B Report, which involves the amendments envisaged under Amount B to be made into the OECD Transfer Pricing Guidelines, was published on the OECD’s website on 19 February 2024. The report provided for the implementation of Amount B as of 1 January 2025.
Following the publication of the Pillar One – Amount B Report, the IF issued clarifications on the countries covered by Amount B on 17 June 2024 and the Model Competent Authority Agreement for the implementation of Amount B on 26 September 2024.
Finally, Consolidated Report on Pillar One Amount B, which consolidates all subsequent developments to the Report dated 19 February 2024, was published on 24 February 2025.
What does the Revenue Administration’s Announcement Mean for Amount B?
The Revenue Administration announced that Pillar One – Amount B will not be implemented for multinational enterprises’ distributors, sales agents, and commissioners operating in Türkiye. Therefore, the existing transfer pricing regulations and the OECD Transfer Pricing Guidelines will remain applicable to multinational enterprises’ distributors, sales agents and commissioners of multinational enterprises operating in Türkiye.
However, for Türkiye-based multinational enterprises, Amount B may be applicable for their nonresident distributors, sales agents and commissioners, depending on the approach of the country in which they operate.
Conclusion
Based on the Revenue Administration’s announcement, Pillar One – Amount B will not be implemented for multinational enterprises’ distributors, sales agents and commissioners operating in Türkiye, and the existing transfer pricing practices will remain applicable. However, it is important for Türkiye-based multinational enterprises to follow developments regarding the implementation of Pillar One – Amount B in other countries and to develop their transfer pricing practices accordingly.
