What is discretionary income distribution through transfer pricing? (In Turkey)
Transfer pricing, which refers to the price or cost applied to the purchase or sale of goods or services between related parties, is a concept that sets out the basic principles of how the sales of goods and services between related parties should be determined by considering economic and commercial conditions. Discretionary income distribution refers to the transfer of corporate earnings outside the corporation without taxation.
Therefore, when the concepts of transfer pricing and discretionary income distribution are considered together, “discretionary income distribution through transfer pricing ” means the price or value of the goods or services made between related parties, erosion of the tax base by identifying it differently from its counterparts and transferring the corporate income to the related persons without taxation.
