Tax and Trade Finance Services in Turkey

Double Taxation Agreements can affect how cross-border income is allocated and whether treaty relief is available for particular payments or business activities. The analysis should consider the parties' tax residence, the legal character of the payment, the operational substance of the structure, and the documentation required to claim treaty treatment.

The review examines related-party transactions, contractual terms, pricing policies, functional allocation, and supporting documentation to assess whether the arrangement is consistent with Turkish transfer pricing rules and the arm's length principle. Legal agreements and the actual conduct of the parties should describe the same commercial relationship.

Risk commonly arises when the contract, invoice, payment route, and actual supply of goods or services are not aligned. A review should identify the parties responsible for invoicing and withholding, the VAT treatment contemplated by the structure, and whether international invoices and supporting records accurately reflect the transaction.

Depending on the investment type, location, scale, and applicable incentive framework, an Investment Incentive Certificate may support applications for customs duty and VAT exemptions on qualifying capital investments. Eligibility and implementation requirements should be reviewed against the planned procurement and investment schedule.

The review should begin before procurement, import, financing, or construction commitments are finalized. Early analysis allows the investment plan, contracts, invoices, and application documents to be organized around the relevant incentive conditions rather than attempting to correct the structure after costs have already been incurred.

The review should cover the payment or claim conditions, required presentation documents, expiry and shipment dates, governing rules, amendment mechanics, discrepancy risk, and consistency with the underlying sales or supply contract. Bank guarantees should also be checked for demand conditions, caps, duration, and release or reduction mechanisms.

A Letter of Credit or guarantee operates through its own documentary conditions. If those conditions do not match the delivery, inspection, invoicing, or acceptance provisions in the commercial contract, a party may perform the transaction yet still face delayed or refused payment. The documents should be reviewed together before issuance.

Legal counsel can coordinate the review of contracts, transaction records, correspondence, and assessment findings; help organize the company's legal position; and manage communication and procedural steps together with financial and tax advisors.

The available administrative objection and litigation strategy depends on the type of assessment, the supporting audit findings, and applicable procedural deadlines. The notice and underlying file should be reviewed promptly so objections and any tax court action can be prepared within the required timeframe.