Customs Investigates Payments to a Related Foreign Company: Risks for Multinational Businesses in Turkey (2026 Updated Guide)

Turkish Customs investigates payments made by a Turkish importer to a related foreign company. Learn the customs valuation, royalty, transfer pricing, additional duty, penalty and post-clearance audit risks for multinational businesses.

Payments between companies belonging to the same multinational group can create significant customs risks in Turkey. A Turkish subsidiary may purchase imported goods from its foreign parent while also making separate payments for royalties, trademarks, software, technical assistance, management services, research and development, commissions, engineering or other intra-group services. During a post-clearance audit or customs investigation, Turkish Customs may examine whether some of those payments should have been included in the customs value of imported goods. The existence of a related-party relationship does not automatically mean that the declared customs value is incorrect. However, multinational businesses should be prepared to demonstrate the economic purpose of each payment, the relationship between the payment and the imported goods, the pricing structure and why the declared transaction value remains legally acceptable.

Why Does Turkish Customs Investigate Related-Party Payments?

Customs valuation generally begins with the transaction value of imported goods, subject to the applicable legal requirements and adjustments. Where buyer and seller are related, Customs may examine whether that relationship influenced the price.

The investigation can become broader where the Turkish importer makes additional payments to the foreign seller or another group company.

Being Related Does Not Automatically Invalidate the Transaction Value

A parent-subsidiary or other group relationship does not by itself establish that the invoice price is artificially low.

The critical issue is whether the relationship influenced the price and whether legally required additions to customs value were properly declared.

Customs May Look Beyond the Commercial Invoice

An invoice showing the purchase price of the goods may represent only one part of the commercial relationship.

Auditors may examine license agreements, service agreements, transfer-pricing policies, accounting ledgers, bank transfers, intercompany invoices and year-end adjustments.

Which Payments Can Attract Customs Attention?

Particular scrutiny can arise around royalties and license fees, trademark payments, patent or know-how fees, software charges, engineering and design costs, commissions, research and development contributions, tooling costs, management charges and other payments made to related foreign companies.

Not every such payment belongs in customs value.

Each payment requires its own legal and factual analysis.

Royalties and License Fees Are a Major Risk Area

A Turkish importer may pay a foreign group company for use of a trademark, patent, technology or manufacturing know-how.

The customs question is not simply whether a royalty exists. The relationship between the royalty and the imported goods and the conditions governing the sale must be analyzed under the applicable valuation rules.

A Separate Invoice Does Not Automatically Keep a Payment Outside Customs Value

Multinational companies sometimes assume that a payment cannot affect customs valuation because it is invoiced separately from the goods.

Customs analysis focuses on the substance of the transaction rather than invoice formatting alone.

Management Fees Should Be Analyzed Separately

Payments for genuine group management services do not automatically form part of customs value merely because the service provider is related to the importer.

The company should nevertheless be able to demonstrate what services were actually provided and how the charge was calculated.

Generic Service Descriptions Create Risk

Invoices containing descriptions such as “management fee,” “technical service,” “group support” or “license payment” without further detail can create problems during an audit.

Maintain agreements, calculations, correspondence and evidence of the services or rights underlying each payment.

Software Payments Require Careful Analysis

A Turkish company importing machinery or electronic equipment may separately pay a related company for software.

The customs treatment can depend on what the software does, its relationship with the imported goods, how the transaction is structured and the applicable valuation rules.

Engineering and Design Costs Can Become Relevant

Foreign engineering, design, development or technical work connected with production of imported goods may require separate customs analysis.

The location of the work, who paid for it and how it relates to the imported goods can matter.

Free Tools and Production Equipment Can Also Create Valuation Issues

A Turkish buyer may supply molds, dies, tools, materials or technical inputs to a related foreign manufacturer free of charge or at reduced cost.

Where such inputs are used to manufacture imported goods, Customs may examine whether an appropriate value should have been reflected in customs valuation.

Transfer Pricing and Customs Valuation Are Not the Same

This distinction is critical for multinational businesses.

Corporate tax transfer pricing asks whether related-party transactions comply with tax principles. Customs valuation asks whether the declared customs value satisfies customs legislation.

A transfer-pricing report supporting a price for corporate tax purposes does not automatically settle the customs valuation question.

Tax and Customs Incentives Can Point in Opposite Directions

For corporate tax purposes, an importer may face concerns if its purchase price is too high. From a customs perspective, authorities may scrutinize whether the declared import value is too low.

Multinational businesses therefore need coordinated tax and customs policies.

Year-End Transfer Pricing Adjustments Can Trigger Customs Questions

A group may make a year-end debit or credit adjustment to achieve a target operating margin for the Turkish subsidiary.

Customs should assess whether the adjustment relates to previously imported goods and whether it affects the customs value of particular declarations.

Debit Adjustments Can Create Additional Duty Exposure

If the Turkish importer pays an additional amount to the foreign seller after importation, Customs may examine whether the additional payment effectively increases the price of previously imported goods.

A declaration-by-declaration analysis may be required.

Credit Adjustments Also Require Analysis

A later credit does not necessarily produce an automatic customs refund.

The legal basis of the adjustment, connection with specific imports and applicable repayment requirements should be reviewed separately.

Customs Can Examine the Company’s General Ledger

Post-clearance audits can extend beyond customs declarations themselves.

Accounting records may reveal payments to foreign affiliates that are not immediately visible from import documentation.

Bank Transfers Can Be Compared With Customs Declarations

Auditors may compare foreign payments with declared import values.

Large or recurring payments to the seller or another group company can generate questions concerning their commercial purpose.

Customs May Request Intercompany Agreements

Multinational companies should maintain executed and current agreements governing product purchases, royalties, technical services, management services, commissions and other intra-group arrangements.

An agreement prepared only after an audit begins may have significantly less evidentiary value.

The Economic Substance Must Match the Contract

Having a written service agreement is not sufficient if accounting and operational records show a different reality.

Contracts, invoices, payments and actual business operations should tell a consistent story.

Customs May Examine Whether the Relationship Influenced the Price

If the Turkish subsidiary buys goods at prices materially different from comparable independent customers, Customs may ask why.

The company should be prepared to explain legitimate differences involving volume, market level, contractual terms, geography or other commercially relevant factors.

Comparable Independent Sales Can Be Valuable Evidence

Where the foreign manufacturer sells identical or similar goods to independent Turkish or other comparable customers, those transactions may provide useful evidence.

Comparability should be analyzed carefully rather than relying on a superficial price comparison.

Product and Commercial Level Matter

A distributor purchasing thousands of units should not necessarily be compared directly with a small unrelated customer purchasing a few units.

Quantity, distribution functions, warranty obligations, payment terms and market level may explain price differences.

Related Companies Must Be Identified Correctly

The multinational group should map all companies involved in manufacturing, invoicing, licensing, financing and service provision.

Payments to a sister company may be just as relevant to an investigation as payments directly to the foreign seller.

Customs May Investigate Payments Made Indirectly

Routing a payment through another affiliate does not necessarily prevent Customs from examining its connection with imported goods.

The complete transaction chain should be transparent.

Prepare a Payment-by-Payment Matrix

One of the most effective audit-defense tools is a matrix identifying:

the foreign recipient; relationship with the Turkish importer; contractual basis; payment type; amount; accounting code; relevant period; connection, if any, with imported goods; and customs treatment adopted.

This allows the company to distinguish genuine customs-valuation issues from unrelated group payments.

Match Payments to Specific Imports Where Possible

If Customs alleges that a payment belongs in customs value, determine whether it can actually be connected with particular goods or declarations.

A broad annual payment should not automatically be allocated across every import without examining its economic basis.

Historical Exposure Should Be Calculated Declaration by Declaration

If Customs believes certain payments were omitted from customs value, the company should identify which import declarations are potentially affected.

Do not assume that one problematic agreement automatically affects every historical import.

Review Applicable Limitation Periods

Historical customs exposure depends on the relevant declaration dates, legal basis and circumstances.

A multinational company facing a multi-year audit should create a declaration chronology immediately.

Additional Customs Duties May Follow

If Customs increases the customs value, additional customs duty and other import taxes calculated by reference to customs value may potentially arise.

The financial impact can therefore be substantially greater than the original disputed payment.

Import VAT Can Also Be Affected

An increase in customs value may affect the tax base for import VAT and other value-based import charges where applicable.

The company should model the complete financial exposure rather than examining customs duty alone.

Customs Penalties Require Separate Analysis

An additional customs debt and an administrative penalty should not automatically be treated as the same legal question.

The statutory basis and factual conditions for any penalty should be reviewed independently.

A Valuation Dispute Does Not Automatically Mean Fraud

Related-party valuation disputes can arise from genuinely complex legal and accounting questions.

The existence of an undeclared intra-group payment does not by itself establish intentional customs fraud.

But False Documentation Can Create Much Greater Risk

The situation becomes significantly more serious where authorities suspect fabricated service agreements, false invoices, concealed payments or deliberately misleading information.

Companies should never alter historical records after an audit begins.

Preserve the Original Accounting Evidence

Keep general ledger entries, invoices, contracts, bank records, transfer-pricing documentation, customs declarations and correspondence in their original form.

Any explanatory schedules created for the investigation should be clearly identified as later analyses.

Coordinate the Customs and Tax Teams

The customs defense should not contradict the company’s corporate tax position.

Statements about transfer pricing, profitability, royalties and intercompany services should be reviewed across both areas.

Coordinate With the Foreign Parent Company

The foreign affiliate may hold essential evidence concerning pricing methodology, third-party sales, royalty calculations and group policies.

Delays in obtaining these records can weaken the Turkish company’s response.

Do Not Provide Inconsistent Explanations

If the Turkish importer describes a payment as a royalty while the foreign parent describes it as management services, Customs may question the reliability of both explanations.

Create a single factual map before responding.

What Happens During a Post-Clearance Audit?

Customs authorities may review historical declarations, accounting information and supporting commercial documentation after goods have already been released.

The fact that goods cleared customs years earlier does not necessarily prevent subsequent examination within the applicable legal framework.

Respond to Information Requests Carefully

Do not send large volumes of unreviewed group documents without understanding what they contain.

Each submission should be accurate, responsive and consistent with previous declarations.

Obtain the Formal Assessment

If Customs concludes that additional duties are payable, obtain the formal assessment and identify the affected declarations, valuation adjustment, tax calculation and legal reasoning.

Record the notification date immediately.

Protect the Customs Objection Deadline

Where the general customs objection procedure applies, Article 242 of the Customs Law provides an important framework for challenging notified customs duties, penalties and administrative decisions.

The applicable deadline should be calculated immediately from formal notification.

Do Not Rely Solely on Audit Meetings

Negotiations and explanations during an audit should not cause the company to miss formal objection rights after an assessment is issued.

Procedural deadlines and substantive discussions should be managed separately.

What Should the Objection Contain?

The company should identify each disputed payment and explain why it should or should not affect customs value.

Attach the relevant agreements, accounting records, payment calculations and commercial evidence rather than making only a general claim that the transaction complies with transfer-pricing rules.

Independent Accounting Analysis Can Help

Complex multinational arrangements may require detailed reconciliation by accounting and customs specialists.

An expert can assist in tracing payments and identifying whether Customs has allocated them correctly across imported products.

Can Customs Apply the Adjustment to All Imports?

The company should challenge unsupported generalization.

If a royalty applies only to certain branded products, for example, its treatment should not automatically be extended to unrelated goods without a proper legal and factual basis.

Review Product-by-Product Exposure

Multinational importers often purchase different product families from the same foreign group.

Create separate valuation analyses for machinery, spare parts, finished goods, components and other categories where their commercial arrangements differ.

Can Previously Paid Duties Be Corrected Voluntarily?

If an internal review identifies a genuine historical valuation error before or during a wider compliance review, available correction mechanisms should be examined promptly.

The timing and legal consequences of any correction depend on the circumstances.

Potential Criminal Exposure Should Be Assessed Separately

Most customs valuation disputes are not automatically criminal cases. However, if authorities allege deliberate concealment, false documentation or conduct potentially falling within anti-smuggling legislation, criminal-defense issues can arise alongside the customs assessment.

Administrative and criminal strategies should then be coordinated carefully.

Company Directors Should Not Assume Automatic Personal Liability

A customs assessment against a company does not by itself establish criminal responsibility of a director.

Personal criminal liability generally requires analysis of the individual’s actual conduct, knowledge and participation under the applicable criminal framework.

Foreign Managers May Need Separate Representation

If foreign directors or employees are personally questioned, their interests may differ from those of the Turkish company.

Individual defense strategy should therefore be considered where personal allegations arise.

Review the Supply and Licensing Structure for Future Imports

A customs audit should not be treated only as a historical dispute.

If the same payment model continues, the company may accumulate additional exposure with every new import declaration.

Create a Customs Valuation Policy

Multinational groups importing regularly into Turkey should maintain a written policy identifying related-party purchases, royalties, assists, commissions, engineering charges, year-end adjustments and other potentially relevant payments.

Establish an Annual Customs–Transfer Pricing Reconciliation

Before year-end adjustments are finalized, tax and customs teams should review whether the adjustment affects imported goods.

This can prevent a corporate tax solution from unintentionally creating customs exposure.

Immediate Defense Strategy

When Turkish Customs investigates payments to a related foreign company, the importer should immediately identify every intra-group payment, classify its economic purpose, review the underlying contracts, determine whether it relates to imported goods, reconcile payments with accounting and customs records, examine related-party pricing, identify potentially affected declarations, calculate duty and penalty exposure, preserve formal objection rights and coordinate customs, tax and criminal-defense strategies where necessary.

Frequently Asked Questions

Does buying from a foreign parent company automatically invalidate the customs value?

No. A related-party relationship does not automatically make the transaction value unacceptable. The effect of the relationship on the price and applicable valuation requirements must be examined.

Are all royalties included in customs value?

No automatic rule should be assumed for every royalty. The specific relationship between the payment, imported goods and conditions of the transaction must be analyzed.

Are management fees automatically included?

No. Genuine management-service payments require their own factual and legal analysis.

Can Customs examine payments made years after the goods were imported?

Post-clearance controls can examine historical transactions within the applicable legal framework. The relevant declaration dates and limitation rules should therefore be reviewed.

Can transfer-pricing documentation prove that the customs value is correct?

It can provide useful evidence, but tax transfer pricing and customs valuation are distinct legal regimes. A transfer-pricing report is not automatically decisive for customs purposes.

Can year-end transfer-pricing adjustments affect customs value?

Potentially. The company should determine whether the adjustment relates to previously imported goods and whether it changes the amount effectively paid for those goods.

Can Customs impose both additional duties and penalties?

Potentially, depending on the facts and applicable provisions. The customs debt and penalty should be analyzed separately.

Can the investigation become criminal?

Potentially, where authorities allege conduct extending beyond an ordinary valuation disagreement, such as deliberate concealment or false documentation. A valuation dispute alone should not automatically be equated with criminal conduct.

Should previous declarations be reviewed?

Yes. The company should identify which historical imports were made under the same payment and pricing arrangements and calculate exposure declaration by declaration.

What is the most important defense step?

Create a complete payment map showing why every amount was paid, who received it, which agreement governs it and whether it is actually connected with the imported goods. A multinational company should defend the economic substance of each payment rather than relying solely on invoice labels or transfer-pricing terminology.

Client-Focused Legal Support for Related-Party Customs Valuation Investigations

Related-company payment investigations can expose multinational businesses to customs valuation adjustments, additional duties, import taxes, administrative penalties, post-clearance audits and, in serious cases, parallel criminal allegations. Fırat Fesih Kaya Law Office assists foreign investors, multinational groups and Turkish importers in customs valuation disputes involving related-party transactions, royalties, licensing arrangements, transfer-pricing adjustments and intra-group service payments. Lawyer Fırat Fesih Kaya provides legal assistance in reviewing historical declarations, responding to customs audits, preparing objections against additional assessments and penalties, coordinating financial evidence and managing parallel administrative and criminal risks where necessary.

Phone:
+90 312 434 22 22

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+90 532 769 22 22

Email:
info@firatfesihkaya.av.tr

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