Tax & Cross-Border Structuring
Cross-Border Tax Planning, Transfer Pricing & International Structuring
International tax practice has been substantially reshaped by the BEPS programme of the OECD and G20, the Two Pillar Solution and the rapid extension of automatic information exchange. Structures that were standard fifteen years ago are no longer viable; structures that are standard today must anticipate further change.
Mermeroglu Legal advises corporates, investors and high-net-worth individuals on cross-border tax planning, transfer pricing and international structuring, coordinating with applicable foreign law through experienced partners.
Legal Framework
Three Intersecting Frameworks
The Bilateral Tax Treaty Network
International tax law operates on the foundational concept of jurisdictional allocation: when income or wealth has connections to more than one state, which state has the right to tax it? The answer is provided by over 3,000 bilateral double taxation agreements globally, modelled substantially on the OECD Model Tax Convention and the UN Model. Türkiye has concluded over ninety DTAs, providing the primary framework for cross-border tax planning.
The OECD/G20 BEPS Framework
The BEPS framework addresses base erosion and profit shifting through the 15 BEPS Actions and the Two Pillar Solution. Pillar One reallocates taxing rights for the largest multinationals to market jurisdictions. Pillar Two introduces a global minimum effective tax rate of 15 per cent (the GloBE Rules) applicable to multinational groups with annual revenue exceeding EUR 750 million. Pillar Two implementation from 2024 has produced substantial structural change in multinational tax planning.
Anti-Avoidance & Transparency
The third framework is the substantial body of unilateral anti-avoidance measures — GAAR, specific anti-avoidance rules, controlled foreign company regimes and beneficial ownership requirements — alongside the transparency architecture: the Common Reporting Standard (CRS), Country-by-Country Reporting under BEPS Action 13, the EU DAC framework and proliferating beneficial ownership transparency regimes. Pre-BEPS structures have given way to economic substance requirements and operational tests for tax residence.
Service Areas
Cross-Border Structuring & Holding Vehicles
Advisory on the structuring of international investments, group holding companies and special purpose vehicles — aligning corporate structures with tax treaty networks, substance requirements and operational realities across the principal holding jurisdictions including Netherlands, Luxembourg, Switzerland, Cyprus and Singapore.
Transfer Pricing
Legal review of intra-group agreements, pricing structures and value allocation models under the Arm's Length Principle — covering mandatory documentation, master file and local file requirements, country-by-country reporting and defensible transfer pricing positions in multi-jurisdictional environments.
Tax Treaty Planning & PE Risk
Advisory on treaty interpretation, permanent establishment risk assessment and dispute prevention for cross-border operations and projects. Identifying and mitigating unintended PE exposure arising from construction projects, service arrangements, digital activities and management presence — with particular focus on the MLI amendments to Türkiye's treaty network.
Substance Requirements & Anti-Avoidance
Preventive structuring, beneficial ownership analysis and substance assessments designed to withstand anti-avoidance challenges. Pre-BEPS structures relying on entity formalities and limited operational presence are no longer viable; structures must be supported by genuine operational presence, decision-making capacity and economic substance.
Pillar Two & GloBE Rules Compliance
Advisory on the impact of the Pillar Two GloBE Rules for in-scope multinational groups (consolidated revenue exceeding EUR 750 million) — covering Qualified Domestic Minimum Top-up Tax exposure, Income Inclusion Rule analysis, restructuring of affected group structures and coordination with implementing jurisdictions' legislation.
CRS, CbCR & Transparency Compliance
Advisory on automatic exchange of information obligations under the Common Reporting Standard and Country-by-Country Reporting, FATCA compliance for Türkiye-based financial institutions and affected account holders, and the EU DAC8 framework extending reporting to crypto-assets from 2026.
Tax Controversy & MAP
Support in cross-border tax disputes, coordinated audits and Mutual Agreement Procedure (MAP) proceedings — focusing on early risk identification, audit preparation and strategic resolution. Turkey's MAP caseload has continued to grow, with substantial transfer pricing matters under negotiation with major treaty partners.
Investment Incentives & Sectoral Tax Planning
Advisory on Turkish investment incentive regimes, regional incentive programmes and sector-specific tax treatments — including renewable energy support payment tax treatment, REIT (GYO) tax regime, R&D incentives, free zone tax benefits and the interaction of incentive regimes with Pillar Two Qualified Domestic Top-up Tax requirements.
Private Client & HNW Tax Planning
Cross-border tax planning for high-net-worth individuals — covering residence and domicile analysis, beneficial ownership structuring, the interaction of Turkish and foreign personal tax regimes, and the impact of the UK non-dom reform (effective April 2025) on internationally mobile individuals with UK connections.
VAT & Indirect Tax
Advisory on Turkish VAT (KDV) compliance and cross-border VAT planning — including the VAT treatment of precious metals and bullion, digital services tax exposure, the EU VAT in the Digital Age (ViDA) reforms and the interaction of Turkish KDV with EU and Gulf VAT frameworks in cross-border supply chains.
Sector Intersections
Sectors in Which This Practice is Engaged
Tax structuring engages every sector with cross-border activity. The principal sector intersections include:
- Real Estate & Hospitality — holding structures for cross-border real estate investment, REIT (GYO) tax treatment and double tax treaty planning.
- Energy & Renewables / Oil & Gas — project structuring, ECA-supported transaction tax planning and the tax treatment of renewable support payments.
- Mining & Metals — mining-specific tax regimes, royalty calculation, transfer pricing for intra-group commodity sales.
- Manufacturing & Industrial Products — industrial holding structures, transfer pricing for cross-border supply chains, investment incentive tax planning.
- Technology, Media & Telecommunications — IP licensing structures, digital services tax exposure, transfer pricing for intra-group IP arrangements.
- Financial Institutions — fund domiciliation, financial instrument taxation, withholding tax management.
- Bullion & Money Exchange — VAT/KDV treatment of precious metals, cross-border bullion taxation.
- Construction & Infrastructure — permanent establishment exposure for international contractors operating across jurisdictions.
Jurisdictional Reach
Comparative Jurisdictional Overview
International tax frameworks vary substantially across jurisdictions in the design of corporate tax, the operation of withholding tax, the framework for tax treaty utilisation and the implementation of the BEPS/Pillar Two framework. Mermeroglu Legal advises on transactions engaging the tax and regulatory frameworks of the following jurisdictions, among others:
Turkish corporate tax is regulated by the Corporate Tax Law (Law No. 5520), with the current statutory rate of 25 per cent and 30 per cent for financial institutions. Türkiye maintains over ninety DTAs substantially based on the OECD Model and implemented the BEPS Multilateral Instrument in 2022.
For detailed advice on jurisdictions not listed above — including emerging FDI regimes, country-specific screening procedures or jurisdiction-specific timing and filing requirements — please direct your enquiry through the firm's contact channels. The firm maintains alliance relationships across the principal investment-screening jurisdictions and can provide coordinated advice on multi-jurisdictional matters.
Standards & Instruments
International and Regional Instruments
Cross-border tax structuring engages a substantial framework of multilateral and bilateral instruments. The most operationally significant include:
Türkiye's Bilateral Tax Treaty Network
Türkiye maintains over ninety bilateral double taxation agreements substantially based on the OECD Model Tax Convention. The network covers all major OECD economies, the principal Middle Eastern and North African states, the Caspian and Central Asian region, the PRC, Japan, Korea and significant parts of Sub-Saharan Africa.
BEPS Multilateral Instrument (MLI)
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, signed in June 2017, implements BEPS-related changes across the global tax treaty network. Türkiye signed the MLI in 2017 and ratified in 2022, with substantial coverage of the Turkish treaty network.
OECD/G20 Two Pillar Solution
The Two Pillar Solution agreed by the OECD/G20 Inclusive Framework in October 2021 establishes Pillar One (reallocating taxing rights for the largest multinationals) and Pillar Two (the 15 per cent global minimum effective tax rate through the GloBE Rules). Pillar Two implementation began in 2024 across major jurisdictions.
OECD Common Reporting Standard (CRS)
The CRS provides the framework for automatic exchange of financial account information for tax purposes. Türkiye is a participating jurisdiction and has implemented CRS reporting requirements applicable to financial institutions. The 2024 DAC8 Directive extends the EU framework to crypto-assets from 2026.
EU Anti-Tax Avoidance Directives (ATAD I & II)
ATAD I (Council Directive (EU) 2016/1164) and ATAD II (Council Directive (EU) 2017/952) establish the EU framework for anti-tax avoidance, including controlled foreign company rules, interest limitation rules, exit taxation, hybrid mismatch rules and the GAAR. The Pillar Two Directive (Council Directive (EU) 2022/2523) implements the GloBE Rules in the EU effective from January 2024.
OECD Country-by-Country Reporting & FATCA
Under BEPS Action 13, multinational enterprises with consolidated revenue exceeding EUR 750 million must file Country-by-Country Reports. Türkiye has implemented CbCR for FY 2019 and subsequent years. The US FATCA imposes reporting obligations on foreign financial institutions; Türkiye operates under a Model 1 IGA with the United States in force from 2014.
Our Approach
How Mermeroglu Legal Engages
Cross-border tax mandates routinely engage the tax framework of the investor's residence jurisdiction, the tax framework of the operating jurisdiction, the tax framework of any holding jurisdiction and the bilateral tax treaty network connecting them. Our practice is structured to coordinate across those legal systems through a single point of accountability.
Each mandate is led by a single matter principal at the firm, supported by an internal team drawing on tax structuring, corporate, regulatory and transactional practices. Where the matter requires advice on the law of jurisdictions outside Türkiye, we work through long-standing alliance arrangements with foreign counsel, including in the principal holding company jurisdictions (Netherlands, Luxembourg, Switzerland, Cyprus, Singapore) and the principal operating jurisdictions for client activities.
Our approach to tax structuring places particular emphasis on the operational substance test that has become central to contemporary international tax planning. Pre-BEPS tax structures relying on entity formalities and limited operational presence are no longer viable; structures must be supported by genuine operational presence, decision-making capacity and economic substance. We treat substance analysis as substantive legal work warranting careful attention at the structuring stage.
We maintain continuing advisory relationships with corporate and individual clients on tax planning, given the rate of regulatory change that now characterises the field. The frequency of substantive change in the international tax framework — Pillar Two implementation, DAC updates, treaty amendments, anti-avoidance rule extensions — requires standing engagement rather than transactional review.
INITIAL ENQUIRIES
Complex international structuring matters and tax controversy proceedings are handled through coordinated internal and alliance teams.
Contact Us