How can we make a valuation of current accounts between head office and branch due to construction works performed abroad? (In Turkey)
Regarding the construction works carried out abroad, in the relationship between head office in Turkey and workplace abroad, the activities of goods and services considered as costs or expenses in the workplace and made to workplace abroad by means of issuing invoice from Turkey, and movements of money between workplace abroad and head office in Turkey must be followed up in different accounts and valuation must be carried out accordingly.
Receivables and debts depending on foreign currency arising from services made for exported commodity by means of issuing invoice to workplace abroad by head office, and issuing invoice to abroad shall be subjected to valuation, just like the receivables and debts arising from the export of goods or services, and valuation differences shall be regarded in the determination of tax base.
It is clear that receivables and debts arising from other movements of money performed between the head office in Turkey and workplace abroad, are not real receivables and debts. Therefore, the valuation of the balance of current account based on aforementioned movements of money, is not required.
Source: GİB
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