FINANCIAL INFORMATION AND RISK MANAGEMENT
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
Corporate earnings are subject to income tax rate of 15% according to the Georgian legislation. This ratio is applied to the tax base that
will be calculated as a result of the implementation of exemptions, deductions, addition of disallowable expenses, to the income of
corporations and that are calculated in accordance with the tax laws. Income tax has to be paid until the beginning of April of the following
year. In addition, in accordance with the legislation of Georgia, each year during May, July, September and December the amount of tax, that
calculated according to the previous year income tax, is paid to the tax office by four equal installments of the probable income that is likely
to be obtained the current year. If those prepaid taxes are lower than the final corporate tax, the difference is paid until the beginning of
April of the following year, if it is higher, then the difference is returned to the institution by the tax authorities.
Corporate earnings are subject to income tax rate of 10% according to the Kosova legislation. This ratio is applied to the tax base that will
be calculated as a result of the implementation of exemptions, deductions, addition of disallowable expenses, to the income of corporations
and that are calculated in accordance with the tax laws. Tax has to be paid in advance until April, June, October and January of the current
year and the 15
day of January of the following year by four installments. The amount of tax payment has to be finalized until the beginning
of the April of the following year. If those prepaid taxes are lower than the final corporate tax, the difference is paid until the beginning of
April of the following year, if it is higher, then the difference is returned to the institution by the tax authorities. Two different methods
can be used for the calculation of the prepaid taxes. First method is based on the calculation of the estimated tax on profit and the second
method is based on the basis for more than 10% of the tax on the previous year.
4. Transfer Pricing:
Transfer pricing is regulated through article 13 of Corporate Tax Law titled “Transfer Pricing through camouflage of earnings”. Detailed
information for the practice regarding the subject is found in the “General Communiqué Regarding Camouflage of Earnings Through Transfer
According to the aforementioned regulations, in the case of making purchase or sales of goods or services with relevant persons/
corporations at a price that is determined against “arm’s length principle”, the gain is considered to be distributed implicitly through transfer
pricing and such distribution of gains is not subject to deductions in means of corporate tax.
The Bank resorts to obtaining funds from individuals and institutions residing domestically and abroad, as may be required, by way of
resorting to borrowing instruments such as syndication, securitization, collateralized borrowing and issue of bonds/bills. Such transactions
are at first carried at acquisition cost, and in the following periods they are valued at amortized cost measured by using the internal rate of
XX. Equity Shares and Issuance of Equity Securities
Share issuance related costs are recognized as expenses.
Dividend income related with the equity shares are determined by the General Assembly of the Shareholders.
Weighted average number of shares outstanding is taken into account in the calculation of earnings per share. In case the number of shares
increases by way of bonus issues as a result of the capital increases made by using the internal sources, the calculation of earnings per
share is made by adjusting the weighted average number of shares, which were previously calculated as at the comparable periods. The
adjustment means that the number of shares used in calculation is taken into consideration as if the bonus issue occurred at the beginning
of the comparable period. In case such changes in the number of shares occur after the balance sheet date, but before the ratification of the
financial statements to be published, the calculation of earnings per share are based on the number of new shares. The Bank’s earnings per
share calculations taking place in the income statement are as follows:
Profit attributable to shareholders
Weighted average number of share certificates (‘000)
Earnings per share – in exact TL
XXI. Bank Acceptances and Bills of Guarantee
Bill guarantees and acceptances are realized simultaneously with the customer payments and they are presented as possible liabilities and
commitments in the off-balance sheet accounts.
XXII. Government Incentives
There are no government incentives utilized by the Bank, during the current or prior accounting periods.