Tax planning in group companies and an application in Turkey

Group companies want to minimize the consolidated tax burden of the entire group by making tax planning. With globalization, multinational companies have tended to use aggressive tax planning methods. Among some methods used are such as applying unequal prices according to transfer pricing, differentiating the financial structure of the parent company or affiliated companies established in different countries, making organizations to prevent the permanent establishment in the source country, using tax havens, creating stateless income, and using treaty shopping. Countries cooperate in the face of aggressive tax planning by multinational companies. In this context, the "action plan on base of erosion and profit shifting" prepared by the OECD has an important place. In this thesis, it has been researched whether the increase in related party transactions, decrease the tax burden and the tax burden of sales in Turkey. In addition, the effect of the financial leverage level of companies, their internationality and corporate level on the tax burden and the tax burden of sales were questioned. Panel data analysis was carried out by taking into account 2280 observation data in total for 5 periods of 456 companies with the highest sales revenue between 2013 and 2017 in Turkey. Although it was found that the increase in the related party transactions, decreased the tax burden and the tax burden of sales, no meaningful result was obtained. No meaningful results could be obtained regarding the effect of the increase in financial leverage of companies, their internationalization and corporate structure on the tax burden. It is concluded that a 1% increase in the financial leverage level of companies reduces the tax burden on sales by 0.025%, is highly significant and is in line with the literature. If companies have subsidiaries abroad, the tax burden on sales increases by 0.29%, and it has a meaningful result.