Calculate the tax before the decision is made.
Modelling tax scenarios before investment and structuring decisions: entity type, financing, profit distribution, and double taxation effects.
A model is cheaper than regret
The tax burden is managed by choosing well before the structure is built, not by "optimising" it afterwards. Branch or company, debt or equity, which country to invest through — every choice casts a ten-year tax shadow, and reversing it later costs real money.
The components of the model
Incorporation scenarios
joint-stock company, limited liability company or branch, compared with corporate tax, withholding and liquidation scenarios.
Financing mix
the debt-equity balance within the limits of thin capitalisation and the financing-expense restriction.
Profit distribution plan
double taxation treaty rates and timing effects on the Türkiye-Germany axis.
Intra-group flows
service fees and the transfer-pricing documentation burden.
Output: the decision file
The model produces a decision file for the board of directors: a scenario table, a sensitivity analysis and a recommended structure. The same file becomes the defence folder on the day of a future tax audit, documenting the commercial rationale for the structure that was chosen.
The statutory anchors
The model rests on rules you can point to: the Corporate Tax Law (No 5520), with its thin-capitalisation (Art 12) and transfer-pricing (Art 13) limits; the documentation regime of the Tax Procedure Law (No 213); and the Türkiye–Germany double taxation treaty, whose reduced withholding rates come with conditions that have to be planned for rather than assumed. The choice between a branch and a subsidiary is computed together with permanent-establishment taxation and the withholding on profit repatriation, and stamp tax and fees are managed by planning how many counterparts of the structure documents are signed. Each rule is one line in the model; the sum of the lines is the total burden across both countries — optimising one end is often clawed back at the other.
Process, and who engages us
The model is typically a four-week exercise: data gathering, scenario modelling, legal and tax verification, and presentation of the decision file. Where an incorporation decision is already waiting, we compress the timeline into the deal plan.
Typical clients: German groups investing in Türkiye for the first time, family businesses adding a holding layer, and funds that plan the exit scenario from day one. The incentive line of the model runs with the tax and incentives focus, the incorporation mechanics with our company formation service.
We are by your side for Pre-Investment Tax Modelling
Our legal and tax teams build the model together; we tie the incorporation decision to the steps in our company formation guide, and the implementation to the accounting setup.
Other Applications of This Service
Tax Compliance — our other specialised solutions in this area.
Matter Connections
The focus areas, practice areas, desks and legislation connected with this sub-service.
Our Matters in This Service
The anonymised examples of our work that relate to this service.
Cross-border acquisition of a manufacturing facility in Türkiye
End-to-end representation of the buyer in a multi-jurisdictional acquisition, from due diligence to closing.
Review the matter →Investment · GreenfieldStructuring an incentivised manufacturing investment
Management of company formation, the incentive certificate and compliance processes in a greenfield investment.
Review the matter →Dispute · TaxConcluding a tax audit through settlement
In a transfer-pricing-focused audit; representation from the minutes stage through report assessment, and execution of the settlement strategy.
Review the matter →The Team Delivering This Service
With our multilingual team of lawyers, well-versed in Turkish and German law, we are by your side.
Related Publications
Fresh perspectives and guides from the Knowledge Centre.
As soon as the market decision firms up, before the incorporation documents are drafted. After signing, a model is no more than "damage assessment".
No — it depends on profit repatriation, loss offsetting, and exit scenarios. The decision should be made by looking at the ten-year cash flow, not a single rate.
The model is a decision-making tool; critical assumptions are shown through sensitivity analysis. Where necessary, the uncertainty is formally closed off with an advance tax ruling application.
Pre-Investment Tax Modelling — get the right legal support.
Let us identify the right solution together, drawing on our experience in Türkiye and the DACH region.