FINANCIAL INFORMATION AND RISK MANAGEMENT
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2012
ANNUAL REPORT 2012
affects neither the taxable profit nor the accounting profit and that arises from the initial recognition in the balance sheet, of assets and
liabilities, other than the goodwill and mergers.
The carrying values of deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is measured at enacted tax rates prevailing in the period when the assets are realized or liabilities are settled, and the tax is
recorded as income or expense in the income statement. Nonetheless, if the deferred tax is related to assets directly associated with the
equity in the same or different period, it is directly recognized in the equity accounts.
Deferred tax assets and liabilities in the financial statements of banks and companies are shown by way of offsetting. In the consolidated
financial statements, on the other hand, the deferred tax assets and liabilities that come from the companies as offset are separately
shown in the assets and liabilities.
3. Tax Practices in the Countries that Foreign Branches Operate:
Turkish Republic of Northern Cyprus (TRNC)
According to the tax regulations in the Turkish Republic of Northern Cyprus, corporate gains are separately subject to 10% corporate tax
and 15% income tax. The tax bases for companies are determined by adding the expenses that cannot be deducted according to TRNC
regulations, to commercial gains and by subtracting exemptions and deductions from commercial gains. Income tax is paid in June, and
corporate tax payment is made in two installments, in May and in October. On the other hand, withholding tax is paid in TRNC over interest
income and similar gains of the companies. The relevant withholding tax payments are deducted from the corporate tax-payable. In the
case the amount of the withholding tax collections is are higher than the corporate tax payable, the difference is deducted from income tax
Corporate gains are subject to 24% corporate tax in England. The relevant rate is applied to the tax base that is determined by adding
the expenses that cannot be deducted due to the regulations, to commercial gains and by subtracting exemptions and deductions from
commercial gains. On the other hand, if the tax base of the relevant year, is higher than the amount found by dividing 1.5 million GBP, as
specified in regulations, by the number of participations, in which the Bank has 75% or more share, plus one, the corporate tax payments
are made as temporary tax payments in four instalments in July and October of the relevant year and in January and April of the following
year. Relevant temporary tax payments are deducted from the corporate tax that is finalized until the end of January of the second year
following the relevant year. On the other hand, if the tax base is under the afore-mentioned threshold, corporate tax is paid by the end of
January of the second year following the year that the profit is made.
Banks in Bahrain are not subject to tax according to the regulations of the country.
The Republic of Iraq (Iraq)
Corporate gains are subject to 15% income tax in Iraq. Income tax is accrued at the end of the year and paid in the following year to the
related tax administration by the end of September, at the latest.
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 Kosovo 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 corporate income 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. Tax amount 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 is 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.