ımporting goods from a parent, subsidiary or related company into Turkey? Learn when Turkish customs can challenge related-party pricing, how importers can prove transaction value, what evidence is needed and how to challenge additional duties and penalties.

International corporate groups frequently supply goods to their Turkish subsidiaries, distributors and affiliated companies. A German parent company may sell machinery to its Turkish subsidiary, an Asian manufacturer may supply products to a Turkish company under common ownership, or a multinational group may route purchasing and payments through a centralized procurement or treasury entity. These structures are normal in international trade, but they can attract additional scrutiny under Turkish customs valuation rules because the buyer and seller are related. The most important principle for importers is that a relationship between the buyer and seller does not automatically allow Turkish customs authorities to reject the declared purchase price or replace it with a higher value. The critical issue is whether the relationship influenced the price and whether the declared transaction value satisfies the requirements of Turkish customs legislation. For companies facing a related-party customs valuation investigation in 2026, the defense should therefore focus on proving the commercial reality of the transaction, explaining the group’s pricing methodology and demonstrating why the declared value represents an acceptable customs value.

What Is a Related-Party Import Transaction?

A related-party transaction exists where the foreign seller and Turkish importer have one of the relationships recognized under the applicable customs valuation rules.

Common commercial examples include transactions between a parent company and subsidiary, sister companies controlled by the same group, companies connected through ownership or control, and other legally recognized relationships between buyer and seller.

The precise legal definition matters because ordinary commercial cooperation alone does not necessarily make two companies related for customs valuation purposes.

Parent Company Selling Goods to a Turkish Subsidiary

This is perhaps the most common example.

A foreign manufacturer owns a Turkish subsidiary and sells products directly to it.

The Turkish subsidiary imports the goods and declares the intercompany purchase price as the basis for customs valuation.

Customs may investigate whether the corporate relationship caused the price to be lower than it would have been between independent companies.

Sister Companies

Two companies controlled by the same parent may also engage in international transactions.

For example:

German Parent Company

↓

Polish Manufacturing Subsidiary → Turkish Distribution Subsidiary

The Polish seller and Turkish buyer may require related-party customs valuation analysis even though neither directly owns the other.

Does Being Related Automatically Invalidate the Invoice Price?

No.

This is one of the most important misconceptions in related-party customs disputes.

The mere existence of a corporate relationship does not automatically require rejection of the transaction value.

The central issue is whether that relationship influenced the price.

Customs Must Examine the Transaction

A company should therefore distinguish two questions:

Are the buyer and seller related?

and

Did that relationship affect the price?

An affirmative answer to the first does not automatically establish the second.

Why Does Customs Examine Related Companies More Closely?

Independent buyers and sellers normally negotiate against each other’s economic interests.

A seller wants a higher price.

A buyer wants a lower price.

Related companies may have broader group objectives.

For example, a multinational group may determine prices according to tax, treasury, distribution or profitability policies rather than ordinary independent negotiations.

This makes the transaction worthy of closer customs analysis.

When Can Customs Challenge the Declared Value?

Customs may question the declared transaction value where there are reasonable grounds to doubt whether the related-party price reflects an acceptable transaction value under customs legislation.

Several circumstances can attract scrutiny.

The Declared Price Is Significantly Below Comparable Imports

Suppose a Turkish subsidiary imports a product from its parent for EUR 40 per unit.

Independent Turkish importers purchase apparently comparable products from the same manufacturer for EUR 70.

Customs may ask why the subsidiary receives such a substantial price advantage.

The importer should be prepared to explain it.

A Low Price Is Not Automatically Unlawful

The subsidiary may purchase substantially greater quantities.

It may perform functions normally performed by the foreign supplier.

It may assume warranty obligations.

It may pay in advance.

It may have a long-term distribution commitment.

The product specifications may differ.

The commercial explanation must be supported by evidence.

Customs May Examine the Circumstances Surrounding the Sale

The importer should be prepared to demonstrate how the intercompany price was established.

This may require examination of the group’s commercial pricing policy.

How Was the Price Calculated?

Possible pricing methods include:

cost plus a margin;

resale-price methodology;

comparable independent sales;

standard group price lists;

annual transfer-pricing adjustments;

or negotiated distributor pricing.

The company should understand its own methodology before explaining it to customs.

Transfer Pricing Documentation Can Help

Multinational groups often maintain transfer-pricing reports for corporate income tax purposes.

These documents may contain valuable information concerning the functions performed by group companies, risks assumed, comparable companies and pricing methodology.

However, they should not automatically be treated as conclusive for customs purposes.

Tax Transfer Pricing and Customs Valuation Are Different

This distinction is critical.

Corporate income tax authorities may focus on whether profits are appropriately allocated between related companies.

Customs authorities focus on the legally determined customs value of imported goods.

A transfer-pricing policy that is acceptable for corporate tax purposes does not necessarily resolve the customs valuation question.

The Two Systems Can Create Opposite Incentives

From a corporate income tax perspective, authorities may sometimes question whether the Turkish company paid too much to its foreign affiliate.

From a customs perspective, authorities may question whether it paid too little.

Multinational companies therefore need coordinated tax and customs policies.

Customs Value Should Not Be Managed Separately From Transfer Pricing

A group that changes intercompany prices at year-end for transfer-pricing purposes should examine the customs consequences of those adjustments.

This issue is often overlooked.

Year-End Transfer Pricing Adjustments

Suppose the Turkish distributor imports goods throughout 2026 at a provisional intercompany price.

At year-end, the group calculates that the Turkish subsidiary earned a margin outside the targeted range.

The foreign parent therefore issues a EUR 1 million debit adjustment.

Customs may ask whether part of that adjustment relates to goods previously imported into Turkey.

Upward Adjustments Can Create Customs Exposure

If the adjustment effectively increases the price paid for imported goods, the company should assess whether customs declarations require corresponding treatment.

Ignoring the customs implications can create historical valuation risk.

Downward Adjustments Can Also Create Questions

Suppose the foreign parent later issues a large credit note.

The importer may ask whether customs value should be reduced.

The answer is not automatic.

The legal nature, timing and relationship of the adjustment to specific imported goods must be analyzed.

Customs Authorities May Examine Comparable Independent Sales

A particularly useful form of evidence can be the seller’s transactions with independent customers.

Suppose the foreign parent sells the same product:

to its Turkish subsidiary for EUR 100;

to an unrelated Turkish distributor for EUR 102;

and to an unrelated Bulgarian distributor for EUR 99.

These transactions may provide strong evidence that the EUR 100 related-party price was commercially realistic.

But Comparisons Must Be Genuine

The company should compare equivalent commercial circumstances.

Quantity matters.

Delivery terms matter.

Geographic market matters.

Product specifications matter.

Commercial level matters.

Payment terms matter.

Example: Distributor Versus Retailer

A parent company sells 50,000 units to its Turkish distribution subsidiary for EUR 20 each.

It sells 100 units to an unrelated end customer for EUR 35 each.

The EUR 35 transaction should not automatically prove that EUR 20 is too low.

The commercial levels are fundamentally different.

Quantity Discounts Must Be Demonstrated

If volume explains the price difference, produce evidence.

Annual purchase commitments, price lists, discount schedules and historical sales can be useful.

Functions Performed by the Turkish Company

The Turkish subsidiary may perform substantial local functions.

For example, it may handle:

marketing;

warehousing;

distribution;

after-sales service;

warranty;

customer acquisition;

credit risk;

and regulatory compliance.

The pricing structure may reflect these functions.

Risks Assumed by the Importer

A Turkish distributor assuming significant inventory and market risk may require a commercial margin.

This can influence the purchase price.

Exclusive Distribution Agreements

An exclusive distributor may receive preferential pricing in exchange for minimum purchases, marketing investment or market-development obligations.

The agreement should be preserved.

Long-Term Contracts

A price agreed years earlier may differ substantially from current spot-market prices.

The contract date and pricing formula become important evidence.

Customs Should Not Ignore Commercial Reality

A related-party transaction should be examined according to its actual economic structure rather than by assuming that every intercompany discount is artificial.

What Evidence Can Prove the Related-Party Price?

The importer should build a comprehensive valuation file.

The strongest evidence usually combines contractual, financial, accounting and comparative materials.

Intercompany Sales Agreement

The agreement should identify the products, pricing methodology, payment terms, delivery conditions and responsibilities of the parties.

Transfer Pricing Policy

The group’s pricing policy may explain how the import price was established.

Transfer Pricing Report

A contemporaneous report can provide economic analysis supporting the group’s methodology.

Independent Customer Sales

Transactions with unrelated customers can be particularly persuasive where they involve comparable goods and commercial conditions.

Price Lists

Historical price lists can show that related and unrelated buyers were treated consistently.

Purchase Orders

Purchase orders establish the actual price agreed for individual transactions.

Commercial Invoices

Invoices should correspond with the pricing methodology and purchase orders.

Bank and SWIFT Records

Financial records can demonstrate that the declared price was genuinely paid.

Supplier Accounting Records

The foreign affiliate’s ledger can confirm that the same amount was recorded as revenue or receivable.

Turkish Importer Accounting Records

The importer’s accounting entries should correspond with the declared transaction.

Foreign Export Records

Where applicable, foreign customs documentation can provide additional evidence concerning the transaction.

Commercial Correspondence

Emails explaining annual price negotiations or discount structures can support the company’s position.

Board and Management Decisions

Where group pricing is formally approved, contemporaneous corporate records may demonstrate that the methodology existed before the customs investigation.

Do Not Create the Pricing Policy After Customs Asks

A retrospective document prepared solely to justify historical prices will naturally attract scrutiny.

The strongest evidence is contemporaneous.

What Are “Test Values”?

In related-party valuation disputes, legally relevant comparison or test-value mechanisms may help demonstrate that the relationship did not improperly influence the transaction value.

The application of any test must be examined according to the statutory customs valuation framework and the facts of the transaction.

Comparable Values Require Adjustments

A superficially similar transaction may require adjustments for quantity, commercial level or other differences.

Importers should not simply submit a competitor’s invoice and assume the issue is resolved.

What If There Are No Independent Comparable Sales?

This is common in specialized industries.

A foreign manufacturer may sell exclusively through subsidiaries.

The company then needs other evidence demonstrating how the price was established.

Cost Structure Can Become Important

The manufacturer may show:

production cost;

materials;

labor;

overhead;

commercial expenses;

and profit margin.

A consistent cost-plus methodology can help explain the intercompany price.

Manufacturer Profitability

If the foreign seller earns a commercially reasonable profit on sales to the Turkish affiliate, this may form part of the broader valuation analysis.

Turkish Distributor Profitability

Customs may also examine whether the Turkish subsidiary earns an unusually large margin after importation.

A high resale margin can attract questions about whether the import price was artificially low.

High Profit Does Not Automatically Prove Undervaluation

The Turkish company may create significant local value.

Its margin may reflect marketing, distribution, warranty, logistics or market risk.

Again, functions must be examined.

Customs May Examine Resale Prices in Turkey

Where relevant under the applicable valuation methodology, domestic resale information can become important.

The company should therefore understand the relationship between import price and subsequent sales price.

Related-Party Royalties

A particularly sensitive area involves royalties and license fees.

A Turkish subsidiary may pay its foreign parent separately for trademarks, technology, patents or know-how.

Customs may examine whether such payments are connected with the imported goods and whether applicable customs valuation rules require them to be taken into account.

Separately Invoicing a Royalty Does Not Automatically Exclude It

The legal nature of the payment matters more than its accounting label.

Management Fees

A Turkish subsidiary may also pay management fees to its foreign parent.

Customs may examine whether the payment genuinely relates to management services or economically forms part of the imported-goods transaction.

Evidence of Services

Service agreements, reports, employee records and deliverables can help establish the genuine nature of management services.

Procurement Fees

Some groups use centralized procurement companies.

The Turkish importer may pay the procurement company separately.

The customs treatment of that payment should be examined according to the actual functions performed.

Buying Commissions and Selling Commissions

Commission arrangements can receive different customs treatment depending on their nature.

The underlying relationship should therefore be documented accurately.

Research and Development Payments

Payments for R&D, designs or engineering may also require analysis where they are connected with the production of imported goods.

Assists

Certain goods or services supplied by the buyer for use in producing imported goods may affect customs valuation.

Multinational companies should therefore review more than just direct invoice payments.

Free Components Supplied to the Manufacturer

Suppose the Turkish company supplies specialized moulds to its foreign related manufacturer free of charge.

The fact that no money was transferred for those moulds does not necessarily mean they are irrelevant to customs valuation.

Centralized Treasury Structures

A Turkish subsidiary may not pay the foreign manufacturer directly.

Payments may pass through a group treasury company.

This does not automatically invalidate the transaction.

But the payment structure should be transparent.

Intercompany Loans

A company may simultaneously purchase goods and borrow money from its parent.

Payments between the entities should be clearly allocated.

Otherwise, customs may question whether alleged loan repayments represent additional purchase-price payments.

Dividends

Dividend transfers to a foreign parent should likewise be supported by corporate resolutions and accounting records so they can be distinguished from goods payments.

Capital Contributions

Capital movements should also be documented independently.

Why Bank Transfers Matter

Customs may compare declared values with the total financial flows between related companies.

A substantial unexplained transfer can create valuation questions.

Example: Imports of EUR 5 Million, Transfers of EUR 8 Million

The difference does not automatically mean EUR 3 million of customs undervaluation.

The company may have paid:

EUR 5 million for goods;

EUR 1 million loan repayment;

EUR 750,000 royalties;

EUR 500,000 management services;

EUR 750,000 dividends.

But every component should be supported independently.

Prepare an Intercompany Payment Matrix

For each transfer identify:

Date | Amount | Currency | Recipient | Contract | Invoice | Commercial Purpose | Relevant Imports

This can be extremely useful in a customs audit.

What If Customs Rejects the Transaction Value?

The importer should first identify precisely why.

A statement that “the companies are related” should not be treated as a complete valuation analysis.

The company should examine whether customs has established that the relationship affected the price or otherwise identified a lawful reason for rejecting the declared value.

Then Examine the Replacement Value

Even if customs is entitled to reject the transaction value, the alternative customs value must still be determined under the applicable valuation rules.

Customs Cannot Simply Choose the Highest Available Price

The importer should determine which valuation method was used and how customs performed the calculation.

Comparator Evidence Should Be Tested

If customs relies on another importer, examine:

product specifications;

quantity;

transaction date;

commercial level;

Incoterm;

country of origin;

manufacturer;

and payment conditions.

Confidential Comparator Information

Customs proceedings can involve information concerning other importers that may be subject to confidentiality limitations.

The importer should nevertheless seek sufficient reasoning and information to understand and challenge the valuation methodology through the applicable procedural mechanisms.

Can Customs Increase the Value Retroactively?

Potentially, where previous declarations are lawfully subject to review and customs concludes that the declared values were deficient.

This makes recurring related-party pricing particularly important.

One Investigation Can Affect Hundreds of Imports

Suppose a Turkish subsidiary imports monthly from its parent.

Customs challenges the pricing method used for the last shipment.

If the same methodology was used for three years, the historical financial exposure can become substantial.

Audit Historical Declarations Immediately

The company should determine:

number of affected declarations;

total customs value;

potential valuation adjustment;

additional customs duties;

possible penalties;

and year-end transfer-pricing adjustments.

Review Previous Transfer Pricing Adjustments

A customs investigation may reveal that annual debit adjustments were never analyzed from a customs perspective.

This can become one of the largest areas of exposure.

Can Customs Impose Administrative Penalties?

Where a valuation adjustment produces deficient customs duties, additional assessments and administrative penalties may arise according to the applicable provisions and circumstances.

The amount can be commercially significant.

Can Related-Party Valuation Become a Smuggling Case?

A legitimate disagreement concerning intercompany pricing should not automatically be treated as criminal conduct.

However, the risk changes if authorities allege deliberately false invoices, hidden payments, double invoicing or intentional concealment designed to reduce customs liabilities.

In such circumstances, Anti-Smuggling Law No. 5607 may become relevant.

Administrative Valuation and Criminal Intent Are Different Questions

A company can be wrong about customs valuation without its directors necessarily committing a criminal offense.

Individual knowledge and conduct must be assessed separately.

Protect Company Directors

The company should identify who actually established the pricing methodology.

Was it the Turkish managing director?

Foreign headquarters?

Tax department?

Regional finance team?

Procurement?

An external adviser?

The answer matters.

Authorized Signature Is Not the Same as Pricing Responsibility

A director who signs company documents may have had no role in determining transfer prices.

The actual workflow should be documented.

Customs Broker’s Role

Customs brokers normally declare values based on documents and information supplied by the importer.

The company should preserve what was provided to the broker.

What If the Importer Did Not Tell the Broker About a Year-End Adjustment?

This may become an important issue.

The company should investigate why the information was not communicated and whether corrective action is available.

Internal Customs and Tax Teams Must Communicate

One recurring multinational-company problem is organizational separation.

The tax team adjusts transfer prices.

The customs team never learns about the adjustment.

The accounting team books it.

The Turkish customs declarations remain unchanged.

This creates avoidable exposure.

Build a Customs–Tax Reconciliation Process

Companies importing from related parties should periodically reconcile:

customs declarations → intercompany invoices → transfer-pricing adjustments → royalties → service fees → accounting records → bank transfers.

What Should Companies Do Before a Customs Audit?

Prepare the valuation evidence before authorities request it.

Waiting until an investigation begins makes reconstruction much more difficult.

Maintain a Related-Party Customs Valuation File

The file should explain:

corporate relationship;

pricing methodology;

functions of each company;

risks assumed;

independent comparables;

payment structure;

royalties;

transfer-pricing adjustments;

and supporting documentation.

Review It Annually

The commercial structure can change.

A methodology that was defensible in 2024 may no longer reflect the group’s operations in 2026.

Changes in Supply Chain Matter

If manufacturing moves from Germany to China while the invoice continues to come from a European group company, customs valuation and supply-chain documentation should be reviewed.

New Royalty Arrangements Matter

If the group introduces a new trademark or technology fee, its customs implications should be examined before payments begin.

New Treasury Arrangements Matter

Centralized payment structures can change the apparent relationship between invoices and bank transfers.

Customs documentation should remain capable of explaining the financial chain.

Internal Audit Is Particularly Important

A customs investigation should not be the first time management attempts to understand its own intercompany pricing.

First 24 Hours After Customs Challenges a Related-Party Price

The importer should preserve the customs declaration, invoice, intercompany agreement, transfer-pricing documentation, payment records and relevant correspondence.

The company should identify the precise reason customs questioned the value.

First 72 Hours

The company should reconstruct the pricing methodology, identify independent comparable transactions, reconcile bank transfers and determine whether royalties, management fees or year-end adjustments exist.

First Week

The importer should audit previous related-party imports, quantify potential exposure, prepare supporting economic and accounting evidence and protect all applicable administrative deadlines.

Evidence Checklist for a Related-Party Customs Dispute

A strong file may include:

intercompany agreement → pricing policy → transfer-pricing study → purchase orders → invoices → independent customer comparables → SWIFT records → supplier ledger → importer ledger → royalty agreements → service agreements → year-end adjustments → customs declarations.

The objective is to show the complete economic relationship rather than one isolated invoice.

2026 Legal Strategy for Related-Party Customs Valuation in Turkey

When Turkish customs challenges the declared value of goods purchased from a parent, subsidiary or other related company, the importer should first establish whether the relationship itself satisfies the applicable legal definition and then determine precisely why customs believes that relationship influenced the price. The company should reconstruct the pricing methodology using contemporaneous intercompany agreements, transfer-pricing documentation, purchase orders, invoices, accounting records and bank transfers. Independent sales of identical or comparable products should be identified where available, but differences in quantity, commercial level, delivery terms and market conditions must be taken into account. The company should separately review royalties, license fees, management fees, procurement payments, assists and other financial flows that may potentially affect customs value. Year-end transfer-pricing adjustments require particular attention because a later debit or credit adjustment can create customs consequences for goods already imported. If customs rejects the declared transaction value, the importer should also examine whether the alternative valuation methodology and comparator transactions are legally appropriate. Finally, historical declarations using the same pricing structure should be audited immediately. The practical strategy is therefore: identify the related-party relationship → determine why customs challenges the price → document the intercompany pricing methodology → compare independent transactions → reconcile invoices and bank payments → analyze royalties and other payments → review year-end transfer-pricing adjustments → examine customs’ comparator transactions → challenge an unsupported rejection of transaction value → verify the alternative customs valuation → audit historical imports → quantify potential duties and penalties → protect procedural deadlines → pursue appropriate administrative and judicial remedies.

Frequently Asked Questions

1. Can Turkish customs increase the declared value simply because the importer and exporter are related?

No. The existence of a related-party relationship is important, but it does not by itself automatically mean that the declared transaction value must be rejected. Whether the relationship influenced the price must be examined under the applicable customs valuation rules.

2. Can a Turkish subsidiary import goods from its foreign parent at a discounted price?

Potentially, yes. The importer should be able to demonstrate the commercial basis of the discount and why the price remains acceptable under customs valuation rules.

3. Can transfer-pricing reports prove the customs value?

They can provide useful evidence, particularly concerning pricing methodology, functions, risks and comparables. However, corporate tax transfer pricing and customs valuation are distinct legal frameworks, so a transfer-pricing report does not automatically determine the customs result.

4. Can customs compare the related-party price with sales to independent customers?

Comparable independent transactions can be relevant. However, product characteristics, quantity, commercial level, transaction date, Incoterms and other differences should be considered before drawing conclusions.

5. Do year-end transfer-pricing adjustments affect customs declarations?

Potentially. Where a debit or credit adjustment economically relates to previously imported goods, its customs consequences should be examined carefully rather than treated solely as a corporate tax issue.

6. Can royalty payments to the foreign parent increase customs value?

Potentially, depending on their connection with the imported goods and the requirements of the applicable customs valuation provisions. The substance of the royalty arrangement must be examined.

7. Are management fees automatically included in customs value?

No. The nature of the services and their relationship with the imported goods should be examined. Merely labeling a payment as a “management fee” does not determine its customs treatment.

8. Can customs review previous related-party imports?

Potentially. Where the same pricing methodology was used repeatedly, a valuation investigation can extend to historical declarations within the applicable legal framework.

9. Can a related-party customs valuation dispute become a criminal case?

A genuine valuation disagreement does not automatically constitute a criminal offense. However, allegations involving deliberately false invoices, concealed payments or other intentional conduct can create separate criminal exposure under applicable anti-smuggling legislation.

10. What should a foreign-owned company do when customs challenges its intercompany prices?

Preserve the intercompany agreements, transfer-pricing reports, invoices, purchase orders, bank and SWIFT records, accounting evidence and independent comparables; analyze royalties and year-end adjustments; review historical imports; and protect applicable objection and litigation deadlines.

Legal Support for Related-Party Customs Valuation Disputes in Turkey

Related-party import transactions can create significant customs exposure where authorities question intercompany purchase prices, transfer-pricing adjustments, royalties, management fees, centralized treasury payments, independent comparables or historical customs declarations. These disputes require coordinated analysis of customs law, corporate pricing, accounting records and the actual commercial relationship between the foreign seller and Turkish importer.

Fırat Fesih Kaya Law Office provides legal assistance to foreign investors, multinational groups, foreign parent companies and Turkish subsidiaries facing related-party customs valuation disputes in Turkey.

Fırat Fesih Kaya can analyze intercompany import structures, examine customs and transfer-pricing documentation, reconstruct related-party payments, challenge customs valuation adjustments and penalties, review historical declarations and represent companies in the applicable administrative and judicial proceedings.

Phone: +90 312 434 22 22
Mobile Phone: +90 532 769 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yildirim Tower, Balgat, Cankaya / Ankara, Turkey