The tax obligations related to opening a branch in the customer’s country abroad can be summarized as follows:
Invoice Issuance: It is possible to issue invoices in the name of the branch abroad, and these transactions must comply with the tax laws of the country where the branch is located.
Transfer Pricing: Transactions with the branch must be priced at arm’s length. A transfer pricing report should be prepared by the parent company in Turkey for the branch’s activities, and there is no need for the branch itself to prepare a separate report.
VAT Exemption: Export deliveries are exempt from VAT. However, any tax paid by the branch abroad cannot be deducted from the VAT calculated in Turkey.
Source: Revenue Administration
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