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Türkiye Vakıflar Bankası Türk Anonim Ortaklığı
Unconsolidated Financial Report as at and
For the Year Ended 31 December 2013
(Currency: Thousands of Turkısh Lıra (“TL”))
(Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Section 3 Note I)
Pension fund
The employees of the Bank are the members of “Türkiye Vakıflar Bankası Türk Anonim Ortaklığı Memur ve Hizmetlileri Emekli ve Sağlık Yardım Sandığı
Vakfı” (“the Fund”) established on 15 May 1957 as per the temporary article no. 20 of the Social Security Law no. 506.
The first paragraph of the temporary article no. 23 which states the Banks should transfer pension funds to the Social Security Institution within three
years after the issue date of the Banking Law no.5411, issued in the 1 November 2005 dated and 25983 numbered Official Gazette, has been cancelled
by the Constitutional Court’s 22 March 2007 dated and 2007/33 numbered decision. Reasoned ruling of the Constitutional Court has been issued on 15
December 2007 in the Official Gazette no. 26731. The reason for the cancellation decision by Constitutional Court was stated as possible future losses on
acquired rights of Fund members.
Following the publication of the ruling, the Turkish Parliament started to work on new legal arrangements and the Social Security Law no. 5754 (“the
Law”) has been approved on 17 April 2008. The Law is enacted by the approval of the President of Turkey and issued on the 8 May 2008 dated and
26870 numbered Official Gazette.
In accordance with the temporary article no. 20 of the Article no. 73 of the Law;
The discounted liability for each fund in terms of the persons transferred as at the transfer date, including the contributors left the fund, should be
calculated by the assumptions below:
a) The technical interest rate to be used for the actuarial calculation is 9.80%
b) Income and expenditures in respect to fund’s insurance division are considered in the calculation of discounted liability.
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 transfering 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 has extended for one year.
The employer of pension fund participants (the Banks) 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 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 2014 in compliance with the principles explained above,
there is no technical or actual deficit determined which requires provision against.
XVI. Information on taxation
Corporate tax
Corporate tax rate is 20% in Turkey. 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.
The prepaid taxes are calculated and paid at the rates valid for the earnings of the related years. The payments can be deducted from the annual
corporate tax calculated for the whole year earnings.
In accordance with the tax legislation, tax losses can be carried forward to offset against future taxable income for up to five years. Tax losses cannot be
carried back to offset profits from previous periods.
VAKIFBANK ANNUAL REPORT 2013
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