Customs Valuation of Related-Party Imports in Turkey: How to Prove the Price Is Arm’s Length — 2026 Current Guide

How can related companies prove that an import price is arm’s length in Turkey? Learn the customs transaction-value test, transfer-pricing evidence, comparable prices, audit risks and appeal options in 2026.

Imports between a Turkish company and its foreign parent, subsidiary or affiliate are closely examined by Turkish Customs. The existence of a relationship does not automatically invalidate the invoice price, but Customs may investigate whether the relationship influenced the amount declared for customs purposes.

The importer must be able to demonstrate that the price is commercially genuine, objectively supported and consistent with arm’s-length conditions. A transfer-pricing report can help, but it does not automatically settle the customs valuation question.

If Customs rejects the transaction value, the importer may face additional customs duty, import VAT, interest, administrative penalties and a review of earlier import declarations.

What Is a Related-Party Import?

A related-party import occurs where the buyer and seller have a relationship that may affect the price. Common examples include:

• A Turkish subsidiary importing from its foreign parent;
• Two companies controlled by the same group;
• A company importing from an affiliate;
• A branch purchasing from headquarters;
• A joint venture buying from a shareholder;
• A distributor importing from a group manufacturer;
• A company purchasing from an entity under common control.

The relationship itself is not unlawful. The key issue is whether the relationship influenced the price actually paid or payable.

Transaction Value Is the Starting Point

The primary customs valuation method is generally the transaction value: the price actually paid or payable for goods sold for export to Turkey, subject to legally required additions.

The Turkish Ministry of Trade explains the transaction-value test and alternative valuation methods in its official customs valuation guidance.

The transaction value may be accepted where:

• The sale is genuine;
• The buyer is not subject to prohibited restrictions;
• The price is not dependent on an unquantifiable condition;
• Resale proceeds payable to the seller can be calculated;
• The relationship did not influence the price;
• Required additions can be determined objectively.

How Is Arm’s-Length Pricing Proven?

An importer should provide evidence showing that the price is comparable to what independent parties would have agreed under similar conditions.

Useful evidence includes:

• Comparable uncontrolled transactions;
• Prices charged to unrelated customers;
• Prices paid to unrelated suppliers;
• Independent market quotations;
• Price lists;
• Volume-discount policies;
• Cost-plus calculations;
• Resale-price analysis;
• Benchmarking studies;
• Product-quality comparisons;
• Freight and delivery-term adjustments;
• Warranty and financing differences;
• Contemporaneous negotiation records.

The comparison should account for quantity, model, quality, country, delivery term, warranty, currency, market and date. A price comparison without commercial adjustments may be unreliable.

Transfer Pricing and Customs Valuation Are Different

Transfer-pricing rules focus primarily on the allocation of taxable income between related companies. Customs valuation focuses on the value of imported goods for duty and import VAT purposes.

The two systems overlap but are not identical.

A transfer-pricing report may state that a Turkish distributor should earn a target operating margin. Customs may then ask whether a year-end adjustment changes the price of imported goods.

Likewise, a price accepted by the tax authority does not automatically prove that Customs must accept the declared import value.

Companies should coordinate their tax and customs positions and avoid contradictory explanations.

Documents That Support an Arm’s-Length Price

A strong customs file should contain:

• Intercompany sales agreement;
• Purchase orders;
• Original invoices;
• Price lists;
• Discount schedules;
• Product specifications;
• Import declarations;
• Bank payment records;
• Supplier account statements;
• Freight and insurance documents;
• Transfer-pricing policy;
• Functional analysis;
• Risk-allocation analysis;
• Benchmarking study;
• Comparable transaction data;
• Resale-price calculations;
• Cost-plus analysis;
• Financial statements;
• Profit-margin reports;
• Debit and credit notes;
• Year-end adjustment calculations;
• Correspondence concerning price negotiations.

The importer should prepare a transaction-level reconciliation connecting each invoice, payment and customs declaration.

Why Do Price Differences Exist?

A related-party price may legitimately differ from an unrelated-party price because of:

• Volume;
• Long-term supply commitments;
• Exclusive distribution;
• Product customisation;
• Warranty coverage;
• Financing arrangements;
• Market-entry discounts;
• Promotional campaigns;
• Seasonal sales;
• Different delivery terms;
• Technical support;
• Research and development contributions;
• Currency risk;
• Regional market conditions.

Each difference should be documented rather than explained only in general terms.

Related-Party Price Tests

Customs may examine whether the declared price closely approximates:

• The value of identical goods sold to unrelated buyers;
• The value of similar goods sold to unrelated buyers;
• A comparable resale price;
• A computed manufacturing value;
• Another objectively supported customs value.

The importer should explain why the selected test is commercially appropriate and make reasonable adjustments for differences.

Year-End Adjustments

A year-end debit or credit note may affect customs value where it changes the amount paid for imported goods.

The importer should determine:

• Whether the adjustment was foreseeable at importation;
• Whether the pricing formula was agreed in advance;
• Which products and declarations are affected;
• Whether the adjustment covers services or domestic activity;
• Whether the amount is upward or downward;
• How the adjustment is allocated;
• Whether the adjustment has already been declared.

An upward adjustment may lead to additional duty and import VAT. A downward adjustment does not automatically create a refund and usually requires a direct link to specific import declarations.

Customs Additions Must Also Be Reviewed

Even if the base price is arm’s length, Customs may examine whether the importer omitted additions such as:

• Commissions and brokerage;
• Packing and container costs;
• Buyer-supplied materials;
• Tools, moulds and dies;
• Engineering and design work;
• Royalties and licence fees;
• Resale proceeds payable to the seller;
• Freight and insurance to the Turkish entry point.

The importer should separate these items from the purchase price and support them with objective data.

Transfer-Pricing Adjustments, Royalties and Services

A group payment may cover several elements:

• Imported goods;
• Management services;
• Marketing;
• Technical assistance;
• Software;
• Royalties;
• Financing;
• Domestic distribution.

A single intercompany debit note should not automatically be treated entirely as a customs-value adjustment. The importer should allocate each element and explain which amounts relate to imported goods.

What If Customs Questions the Group Relationship?

Customs may request:

• Group structure;
• Shareholding records;
• Intercompany agreements;
• Board approvals;
• Transfer-pricing reports;
• Comparable prices;
• Profit-margin calculations;
• Resale data;
• Cost-accounting records;
• Bank payments;
• Year-end adjustment files.

The importer should demonstrate that the group relationship did not dictate an artificially low or high price.

A parent-company instruction to achieve a specific group profit may be relevant, but it does not automatically prove customs undervaluation. The complete pricing process must be examined.

Post-Clearance Audit

Turkish Customs may investigate related-party imports after release. The audit may cover:

• Multiple financial years;
• Several suppliers;
• Different product lines;
• Transfer-pricing adjustments;
• Royalty payments;
• Credit and debit notes;
• Bank records;
• ERP data;
• Resale prices.

Under the general framework of Customs Law No. 4458, under-assessed customs duties may generally be notified within three years from the date the customs debt arose, subject to statutory exceptions.

The importer should identify exactly which declarations and periods are included in the audit.

Financial and Penalty Risks

If Customs rejects the transaction value, the importer may face:

• Additional customs duty;
• Import VAT on the revised customs base;
• Additional customs duties;
• Interest;
• Administrative customs penalties;
• Storage and financing costs;
• Contractual disputes with the group supplier.

A genuine pricing error should be distinguished from intentional concealment. Fabricated invoices, undisclosed side payments or knowingly false statements may create more serious administrative or criminal risks.

How Can the Importer Defend the Price?

The importer should:

1. Obtain the written Customs request or assessment.
2. Identify all declarations under review.
3. Prepare an arm’s-length pricing explanation.
4. Provide comparable transaction evidence.
5. Reconcile invoices, payments and accounting records.
6. Explain discounts and delivery terms.
7. Separate goods from services and royalties.
8. Analyse year-end adjustments.
9. Provide related-party documentation.
10. Challenge unsupported reference prices.
11. Preserve electronic records.
12. Obtain specialist legal advice.

The response should be consistent with the company’s tax, accounting and transfer-pricing filings.

Challenging a Customs Valuation Decision

The importer may challenge:

• The conclusion that the relationship influenced the price;
• Rejection of the transaction value;
• Use of an incorrect comparable transaction;
• Failure to make commercial adjustments;
• Incorrect inclusion of royalties or services;
• Incorrect allocation of freight or assists;
• The customs duty and VAT calculation;
• The penalty;
• Notification or limitation defects.

Under Article 242 of Customs Law No. 4458, an objection is generally filed within 15 days from lawful notification of the customs decision.

If the objection is rejected, proceedings may be brought before the competent tax court within the applicable procedural period. A separate suspension-of-execution request may be necessary because an objection or lawsuit does not automatically suspend collection.

Settlement may be available for certain customs debts and penalties. The importer should compare settlement with litigation and potential contractual recovery.

2026 Compliance Priorities

In 2026, Turkish Customs increasingly compares:

• E-invoices;
• E-ledgers;
• ERP records;
• Transfer-pricing reports;
• Bank payments;
• Customs declarations;
• Resale data;
• Debit and credit notes;
• Group-company accounting.

Multinational companies should maintain a unified tax-customs pricing policy, review customs effects before year-end adjustments and preserve shipment-level data.

Frequently Asked Questions (FAQ)

1. Are related-party import prices automatically rejected?

No. The importer can prove that the relationship did not influence the price.

2. What does arm’s-length pricing mean for Customs?

It means that the related-party price is comparable to the price independent parties would have agreed under similar conditions.

3. Is a transfer-pricing report sufficient by itself?

Usually not. Customs may also require invoices, payment records, comparable prices, contracts and product-specific analysis.

4. Can a low related-party price be accepted?

Yes, if the discount, market conditions, volume and commercial terms are objectively supported.

5. Can a year-end adjustment change customs value?

Potentially. The adjustment must be analysed to determine whether it relates to imported goods and whether additional duty or repayment procedures apply.

6. Can Customs request the group’s financial records?

It may request relevant accounting, transfer-pricing and payment records during an audit or valuation investigation.

7. Are royalties paid to a parent company included automatically?

No. Their connection with imported goods and the condition-of-sale test must be examined.

8. Can Customs use prices from unrelated imports as reference values?

It may consider comparable transactions, but differences in product, quantity, quality, delivery terms and market should be properly analysed.

9. What is the Turkish objection deadline?

An objection is generally filed within 15 days from lawful notification under Article 242 of Customs Law No. 4458.

10. Can an importer challenge a customs finding that the relationship affected the price?

Yes. The importer can provide arm’s-length evidence and challenge the valuation methodology, duty calculation and penalty.

This article is intended for general informational purposes only. To avoid any loss of rights, we recommend consulting your lawyer regarding your specific circumstances.

Legal Support for Related-Party Customs Valuation

Fırat Fesih Kaya Law Office advises multinational groups, foreign parent companies, Turkish subsidiaries, importers, manufacturers and distributors on related-party customs valuation.

Lawyer Fırat Fesih Kaya can assist with arm’s-length analyses, transfer-pricing coordination, comparable transactions, year-end adjustments, royalty and service payments, customs audits, additional-duty assessments, administrative objections and tax-court proceedings.

For urgent legal support:

Mobile / WhatsApp: +90 532 769 22 22
Office: +90 312 434 22 22
Email: info@firatfesihkaya.av.tr
Address: Mevlana Boulevard No: 221, Yıldırım Tower, Balgat, Çankaya / Ankara, Turkey