VAKIFBANK
2015 ANNUAL REPORT
132
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI
UNCONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
Law requires the transfer to be completed in three years beginning from 1 January 2008. The three year period has expired on 8 May 2011; however, it
has been extended to 8 May 2013 with the decision of Council of Ministers published in Official Gazette dated 9 April 2011. Before the expiration date,
with the decision of Council of Ministers published in Official Gazette dated 3 May 2013, the period for transferring banks, insurance and reassurance
firms, board of trade, exchanges or participants, monthly salary paid individuals and beneficiaries of the funds that are constructed for their personnel
to Social Security Institution in the scope of the temporary article no. 20 of the Social Security Law no. 506 published in Official Gazette dated 30 April
2014 extended for one year. The Council of Ministers has been lastly authorized to determine the transfer date in accordance with the last amendment
in the first paragraph of the 20th provisional article of Law No.5510 implemented by the Law No. 6645 on Amendment of the Occupational Health and
Safety Law and Other Laws and Decree Laws published in the Official Gazette dated 23 April 2015 numbered 29335.
The employer of pension fund participants will continue to pay the non-transferable social rights, which are already disclosed in the article of
association of the pension fund, to the pension participants and their right owners, even though the salary payment obligation has been transferred to
the Social Security Foundation.
The technical financial statements of the Fund are audited by the certified actuary according to the “Actuaries Regulation” which is issued as per the
Article no. 21 of the 5684 numbered Insurance Law. As per the actuarial report dated February 2016 in compliance with the principles explained above,
there is no technical or actual deficit determined which requires provision against as at 31 December 2015.
XVII. INFORMATION ON TAXATION
Corporate tax
Corporate tax rate is 20% in Turkey according to Article 32 of the Corporate Taxes Law No. 5520. This rate is applied to total income of the Bank
adjusted for certain disallowable expenses, exempt income and any other allowances.
Dividends paid to the resident institutions and the institutions working through local offices or representatives are not subject to withholding tax.
Except for the dividend payments to these institutions, the withholding tax rate on the dividend payments is 15%. In applying the withholding tax
rates on dividend payments to the nonresident institutions and the individuals, the withholding tax rates covered in the related Double Tax Treaty
Agreements are taken into account. Appropriation of the retained earnings to capital is not considered as profit distribution and therefore is not subject
to withholding tax.
75% of the associate shares that hold at least 2 years and profits from property sales are exceptional from corporate taxes if there is a capital increase
according to Corporate Tax Law or it is hold for a 5 years on special fund account. The Bank follows these profits in “Revaluation surplus on tangible
assets” under the equity.
75% revenue of the sales from the firms that follows up for their debts and their guarantors’ and mortgagor’ properties, associate shares, founder
shares, redeemed shares and privileges are exceptional from the corporate taxes.
Advance tax that is calculated 20% of the profit from the quarterly period has to be paid on 17th in the two months followed which is declared on 14th
of the same month. Advance tax which is paid during the year is to be set off on corporate taxes that calculates on corporate tax return. Taxes paid is
to collect in cash or is to set off on other financial debts.
According to tax legislation, financial losses which are not exceed over 5 years can be deducted from profit of the company. Losses can not be set off
from retained earnings.
There is no practice about reaching an agreement with laws in Turkey. Corporate taxes are paid on 25th of the fourth month that is followed form the
end of the accounting period. Firms that allowed to analyze taxes, can examine the accounting records and change the amount if there is a wrong
transaction.
Corporation tax legislation for the foreign branches
Bahrain (Manama)
Bahrain branch is non taxable because there is no corporate tax practice in that country. Bahrain branch’ income is added to headquarters
income and it is taxed in Turkey according to Law No. 5520 on Corporate Tax Laws published in the Official Gazette dated 05.06.2012, numbered
B.07.1.GİB.4.99.16.02-KVK-5/1-b-128.
