TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
or income from these funds and their rightful beneficiaries will be transferred to the Social Security Institution and will be subject to this
Lawwithin 3 years after the release date of the related article, without any need for further operation. the three-year transfer period can
be prolonged for maximum 2 years by the Cabinet decision. However related transfer period has been prolonged for 2 years by the Cabinet
decision dated. 14 March 2011, which was published on the Official Gazette dated 9 April 2011 and numbered 27900. In addition, by the
Law “Emendating Social Security and General Health Insurance Act”, which was published on the Official Gazette dated 8 March 2012 and
numbered 28227, this period of 2 years has been raised to 4 years.
On the other hand, the application made on 19 June 2008 by the Republican People’s Party to the Constitutional Court for the annulment
and motion for stay of some articles, including the first paragraph of the provisional article 20 of the Law, which covers provisions on
transfers, was rejected in accordance with the decision taken at the meeting of the afore-mentioned court on 30 March 2011.
The above mentioned law also states that;
• Through a commission constituted by the attendance of one representative separately from the Social Security Institution, Ministry of
Finance, Turkish Treasury, State Planning Organization, Banking Regulation and Supervision Agency, Savings Deposit Insurance Fund, one
from each pension fund, and one representative from the organization employing pension fund contributors, related to the transferred
persons, the cash value of the liabilities of the pension fund as of the transfer date will be calculated by considering their income and
expenses in terms of the lines of insurance within the context of the related Law, and technical interest rate of 9.8%will be used in the
actuarial calculation of the value in cash,
• And that after the transfer of the pension fund contributors, the ones who receive salaries or income from these funds and their rightful
beneficiaries to the Social Security Institution, these persons’ uncovered social rights and payments, despite being included in the trust
indenture that they are subject to, will be continued to be covered by the pension funds and the employers of pension fund contributors.
In line with the new law, the Parent Bank had an actuarial valuation made for the aforementioned pension fund as of 31 December 2012.
In the financial statements for the related period provision was set aside for the amount of actuarial and technical deficit in the actuarial
report dated 30 January 2013 and the amount of the related provision was kept in the financial statements for the current period. The
actuarial assumptions used in the related actuarial report are given in Section Five Note II-h. Besides the Parent Bank, Milli Reasürans T.A.Ş.
and Türkiye Sınai Kalkınma Bankası A.Ş. also had an actuarial report as of 31 December 2012 for the pension fund. The amount of actuarial
and technical deficit in the actuarial report of Milli Reasürans T.A.Ş., which was measured and reflected to the year-end financial statements,
was kept in the financial statements for the current period. As of 31 December 2012 there is not any additional operational or actuarial
liability from Türkiye Sınai Kalkınma Bankası to the Group.
Up to now, there has not been any deficit in İşbank Members’ Supplementary Pension Fund (Türkiye İş Bankası A.Ş. Mensupları Munzam
Sosyal Güvenlik ve Yardımlaşma Sandığı Vakfı), which has been founded by the Parent Bank employees in accordance with the rules of the
Civil Code and which provides subsequent retirement benefits; and the Parent Bank has made no payment for this purpose. It is believed that
the assets of this institution are capable of covering its total obligations, and that it shall not constitute an additional liability for the Parent
Bank. The same is valid for the supplementary pension funds of the employees of Anadolu Anonim Türk Sigorta Şirketi, Milli Reasürans T.A.Ş.
and Türkiye Sınai Kalkınma Bankası A.Ş., which are among the other financial institutions of the Group.
1. Corporate Tax:
Turkish tax legislation does not permit a parent company and its subsidiary to file a consolidated tax return. Therefore, provisions for taxes,
as reflected in the accompanying consolidated financial statements, have been calculated on a separate-entity basis.
In accordance with the Article 32 of the Corporate Tax Law No: 5520, the corporate tax rate is calculated at the rate of 20%. As per the
related law, temporary tax is calculated and paid quarterly in line with the principles of the Income Tax Law and at the corporate tax rate.
The temporary tax payments are deducted from the current period’s corporate tax. The temporary provisional tax for the end of the year
2012 will be paid in February 2013 and will be offset with the current period’s corporate tax.
Tax expense is the sum of the current tax expense and deferred tax charge. Current period tax liability is calculated over taxable profit.
Taxable profit is different from the profit in the income statement since taxable income or deductible expenses for the following years and
non-taxable and non-deductible items are excluded. Current taxes are shown in the financial tables by offsetting with prepaid taxes.
Within the framework of the Corporate Tax Law numbered 5520, 75% of the gains on the sale of the participation shares, which were held
in the assets for a minimum of 2 whole years and 75% of the gains on the sale of immovables are exempt from tax provided that they are
added to the capital as set forth by the Law or that they are kept in a special fund under liabilities for a period of 5 years.
2. Deferred Tax:
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which
deductible temporary differences can be utilized. General provisions that are allocated for possible future risks are included in the tax base
and they are not subject to deferred tax calculation. No tax assets or liabilities are recognized for the temporary timing difference that