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82 A&T BANK ANNUAL REPORT 2015
ARAP TÜRK BANKASI ANONİM ŞİRKETİ
NOTES TO UNCONSOLIDATED FINANCIAL STATEMENTS
AT 31 DECEMBER 2015
(AMOUNTS EXPRESSED IN THOUSANDS OF TURKISH LIRA (“TL”) UNLESS OTHERWISE STATED. )
CONVENIENCE TRANSLATION OF PUBLICLY ANNOUNCED UNCONSOLIDATED FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH, SEE NOTE I OF SECTION THREE
XVII. INFORMATION ON TAX APPLICATIONS
Corporate tax
The corporate tax rate is 20%. Corporate tax rate is calculated on the total income of the Bank after adjusting for certain
disallowable expenses, exempt income and other allowances. No further tax is payable unless the profit is distributed.
Dividends paid to the resident institutions and the institutions working through local offices or representatives are not
subject to withholding tax. The withholding tax rate on the dividend payments other than the ones paid to the non-
resident institutions generating income in Turkey through their operations or permanent representatives and the resident
institutions is 15%.
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 according to Turkish Tax Legislation. 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.
Deferred taxes
The Bank calculates and accounts deferred tax assets and liabilities in accordance with the “TAS 12 - Income Taxes”
and BRSA’s explanations; deferred tax assets and liabilities are recognized on all taxable temporary differences arising
between the carrying values of assets and liabilities in the 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 disguised profit
distribution via transfer pricing cannot be deducted from tax base in accordance with corporate tax.