QDMTT Return for FY 2024 in Turkey

Companies must submit the QDMTT return for the fiscal year 2024 in Turkey. The filing deadline is 31 December 2025.

Turkish Corporate Tax Law requires that constituent entities, such as subsidiaries and branches in Turkey of a Multinational Enterprise (MNE) Group, submit the QDMTT return. This applies if the Ultimate Parent Entity (UPE) reports consolidated revenue exceeding EUR 750 million (converted into Turkish lira) in at least two of the four fiscal years preceding the reporting year.

Who Should File the QDMTT Return?

Supplementary Article 9 defines QDMTT taxpayers as Turkish resident entities within an MNE Group.

Supplementary Article 10(5) allows one designated Turkish entity to file and pay the full QDMTT on behalf of all Turkish group entities. If partial payment or non-payment occurs, all Turkish constituent entities remain jointly liable.

In practice, one Turkish entity usually handles both filing and payment for the entire group.

Transitional Safe Harbour Rules

Temporary Article 17 provides transitional safe harbour relief for fiscal years up to and including 2026 (excluding those ending after 30 June 2028).

If an MNE Group meets any of the transitional tests, both global and domestic top-up taxes, including QDMTT, are deemed zero for Turkey.

Applicable tests based on Qualified Country-by-Country Reporting (CbCR) data:

• De Minimis Test: Total revenue in Turkey is below EUR 10 million and pre-tax profit below EUR 1 million.
• Simplified Effective Tax Rate Test: Turkey’s jurisdictional ETR must be at least 15% in 2024, 16% in 2025, and 17% in 2026.
• Routine Profits Test: Pre-tax profit in Turkey does not exceed the Substance-Based Income Exclusion.

Even if a test is met, Turkish law still requires QDMTT filing. Entities benefiting from safe harbour must file the return.

Data Required for Filing

The Turkish Ministry of Treasury and Finance defines the format, content, and procedures for QDMTT returns. This includes annexes, the competent tax office, and any required notifications or documents.

No secondary legislation (e.g., Communiqué) has been published yet. Therefore, the exact scope of information remains unclear. Groups using transitional safe harbour may have simplified filing obligations. Limited documentation, such as the Simplified ETR calculation, may be sufficient.

If the CbCR is already exchanged under a Qualified Competent Authority Agreement (QCAA), the Turkish Revenue Administration likely will not request the full report again. A summary of relevant data may suffice.

Global Information Return (GIR) Requirement

Supplementary Article 8 requires MNE Groups to file a GIR when submitting a global minimum top-up tax return.

If the GIR has already been filed under a valid QCAA in another jurisdiction and identifies the filing entity and jurisdiction, Turkey does not require a new submission. This rule does not apply to QDMTT filings. Even if the Ministry requests verification, duplicate global-level documentation is unlikely.

Accounting Standards Applicable to QDMTT

For Pillar Two purposes, GloBE Income or Loss calculation starts with the UPE’s Financial Accounting Net Income or Loss. These financials must follow a Qualifying and Authorized Financial Accounting Standard, including:

• IFRS
• GAAP authorized in countries such as Australia, Brazil, Canada, EU/EEA Member States, Hong Kong, Japan, Mexico, New Zealand, China, India, Korea, Russia, Singapore, Switzerland, UK, US
• TFRS or other GAAP permitted by the entity’s authorized accounting organization

Local statutory financials under the Turkish Tax Procedure Law (VUK) cannot be used. Transitional safe harbour (2024–2026) allows simplified CbCR data, but full GloBE computation requires IFRS/authorized GAAP.

Asymmetric FX differences occur when the currency used for financial statements differs from the currency used for tax purposes. This can create FX gains or losses in accounting that do not affect the tax base, distorting the Effective Tax Rate (ETR). OECD rules allow adjustments to correct these distortions.

If the accounting and tax currencies match, no asymmetric FX differences arise. If they differ, Pillar Two rules permit adjustments to GloBE income or covered taxes to maintain a consistent tax calculation.

Under the OECD Pillar Two framework, Turkey calculates QDMTT to ensure a minimum effective tax rate of 15% on income earned within its jurisdiction. The simplified computation process is as follows:

1. Net Income in Turkey (A): Total net income after required adjustments.
2. Adjusted Covered Taxes (B): Total covered taxes allocated to Turkey per Pillar Two rules.
3. Effective Tax Rate (C = B / A): The tax rate effectively paid in Turkey.
4. Gross Payroll Costs (D): Payroll expenses in Turkey.
5. Payroll Deduction (E = D × 9.8%): Deduction based on labour costs.
6. Net Book Value of Tangible Fixed Assets (F): Tangible assets in Turkey.
7. Tangible Asset Deduction (G = F × 7.8%): Deduction based on asset value.
8. Total Deductions (H = E + G): Sum of deductions for payroll and assets.
9. Tax Base (I = A – H): Taxable amount subject to top-up.
10. Top-up Tax Rate (J = 15% – C): Shortfall relative to the minimum ETR.
11. QDMTT Payable (K = I × J): Final domestic top-up tax amount to be paid.

For any questions regarding the Qualified Domestic Minimum Top-up Tax (QDMTT) return in Turkey, please visit Contact page to get in touch.