VAKIFBANK
2015 ANNUAL REPORT
242
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE IN NOTE I. OF SECTION THREE
TÜRKİYE VAKIFLAR BANKASI TÜRK ANONİM ORTAKLIĞI AND
ITS FINANCIAL SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT AND
FOR THE YEAR ENDED 31 DECEMBER 2015
(Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated.)
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.
XVIII. 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)
The Parent Bank’s branch that is operating in Bahrain is non taxable because there is no corporate tax practice in that country. Bahrain Branch’s 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.
North Iraq (Erbil)
The Parent Bank’s branch that is operating in Erbil is taxable according to the country’s law legislation. Declaration of financial records and their tax
payments are differ from cities that are related to centralized government and cities that are related to North Iraq. On the other hand, North Iraq tax
administrations can impute taxes rather than the designated rates.
