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ARAP TÜRK BANKASI A.Ş.
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS AT 31 DECEMBER 2013
( Amounts expressed in thousands of Turkish Lira (“TL”) unless otherwise stated. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED CONSOLIDATED FINANCIAL
STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
4
GENERAL INFORMATION
50
CORPORATE MANAGEMENT
67
FINANCIAL INFORMATION
A&T BANK 2013 ANNUAL REPORT
In applying the withholding tax rates on dividend payments to the non-resident 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.
Tax losses can be carried forward for a maximum period of five years following the year in which the losses were incurred. Tax losses
cannot be carried back.
In Turkey, there is no procedure for a final and definite agreement on tax assessments. Companies file their tax returns with their tax
offices by the end of 25th of the fourth month following the close of the accounting period to which they relate. Tax declarations and
related accounting entries can be investigated by tax authorities for five years from the beginning of the year that follows the date of
filing during which time the tax authorities have the right to audit tax returns, and the related accounting records on which they are
based, and may issue re-assessments based on their findings.
Investment incentive
Investment incentive certificates which are obtained prior to April 24, 2003, can deduct 19.8% investment allowance tax withholding.
After this date, encouraging, undocumented activities directly related to the investment expenses of companies can deduct 40%.
There is no withholding tax for The investments without investment incentive certificates.
As per “Law regarding amendments to the Income Tax Law and Some Other Certain Laws and Decree Laws” accepted on 23 July
2010 at the Grand National Assembly of Turkey, the expression of “can be deducted from the earnings again in the context of this
legislation (including the legislation regarding the tax rate) valid at this date” has been amended as “can be deducted from the
earnings again in the context of this legislation (including the legislation regarding the tax rate as explained in the second clause
of the temporary article no 61 of the Law) valid at this date” and the following expression of “ Investment incentive amount used in
determination of the tax base shall not exceed 25% of the associated taxable income. Tax is computed on the remaining income per
the enacted tax rate” has been added. This Law has been published in the Official Gazette on 1 August 2010.
The clause “The amount which to be deducted as investment incentive to estimate tax base can not exceed 25% of related
income” which has been added to first clause of the temporary 69th article of Law No: 193 with the 5th article of Law No: 6009 on
Amendments to Income Tax Law and Some Other Laws and Decree Laws has been abrogated with the 9 February 2012 dated
decisions no: E.2010/93 and K.2012/20. Accordingly, the Group’s subsidiary operating in finance lease sector have taken these
effects into account while arranging corporate tax declaration for the year 2011.
Deferred taxes
The Group calculates and accounts deferred tax assets and liabilities in accordance with the TAS 12 - Income Taxes; deferred tax
assets and liabilities are recognized on all taxable temporary differences arising between the carrying values of assets and liabilities
in the consolidated financial statements and their corresponding balances used for taxation purposes except for the differences not
deductible for tax purposes and initial recognition of assets and liabilities which affect neither accounting nor taxable profit.
If transactions and events are recorded in the statement of income, then the related tax effects are also recognized in the statement
of income. However, if transactions and events are recorded directly in the shareholders’ equity, the related tax effects are also
recognized directly in the shareholders’ equity.
The net amount of deferred tax receivables and deferred tax payables is shown on the financial tables.
Transfer Pricing
In Turkey, the transfer pricing provisions has been stated under the Article 13 of Corporate Tax Law with the heading of “disguised
profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated 18
November 2007 sets details about implementation.
If the companies enter into transactions concerning to the sale or the purchase of the goods or services with the related parties by
setting the prices or amounts which are not in line with the arm’s length principle, related profits will be treated as having been wholly
or partially distributed in a disguised way via transfer pricing. This kind of disquised profit distribution via transfer pricing cannot be
deducted from tax base in accordance with corporate tax.