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İş Bankası
Annual Report 2013
Financial Information and Risk Management
TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2013
3. Tax Practices in the Countries that Foreign Branches Operate:
Turkish Republic of Northern Cyprus (TRNC)
According to the tax regulations in the Turkish Republic of Northern Cyprus, corporate gains are separately subject to 10% corporate
tax and 15% income tax. The tax bases for companies are determined by adding the expenses that cannot be deducted according
to TRNC regulations, to commercial gains and by subtracting exemptions and deductions from commercial gains. Income tax is paid
in June, and corporate tax payment is made in two installments, in May and in October. On the other hand, withholding tax is paid
in TRNC over interest income and similar gains of the companies. The relevant withholding tax payments are deducted from the
corporate tax-payable. In the case the amount of the withholding tax collections is are higher than the corporate tax payable, the
difference is deducted from income tax payable.
England
Corporate earnings are subject to 23% corporate tax in England. The relevant rate is applied to the tax base that is determined
by adding the expenses that cannot be deducted due to the regulations, to commercial gains and by subtracting exemptions and
deductions from commercial gains. On the other hand, if the tax base of the relevant year, is higher than the amount found the
corporate tax payments are made as temporary tax payments in four installments in July and October of the relevant year and in
January and April of the following year. Relevant temporary tax payments are deducted from the corporate tax that is finalized until
the end of January of the second year following the relevant year. On the other hand, if the tax base is under the afore-mentioned
threshold, corporate tax is paid by the end of January of the second year following the year that the profit is made.
Bahrain
Banks in Bahrain are not subject to tax according to the regulations of the country.
The Republic of Iraq (Iraq)
Corporate earnings are subject to 15% income tax in Iraq. Income tax is accrued at the end of the year and paid in the following
year to the related tax administration by the end of June, at the latest. The corporate tax rate is 15% and the balance sheet must
be presented to the tax office until the end of June of the following year and accrued taxes must be paid. On the other hand, Tax
Administrations Regional Government in Northern Iraq can recognise the fixed tax except signified rates.
Georgia
Corporate earnings are subject to income tax rate of 15% according to the Georgian legislation. This ratio is applied to the tax base
that will be calculated as a result of the implementation of exemptions, deductions, addition of disallowable expenses, to the
income of corporations and that are calculated in accordance with the tax laws. Income tax has to be paid until the beginning of April
of the following year. In addition, in accordance with the legislation of Georgia, each year during May, July, September and December
the amount of tax, that calculated according to the previous year income tax, is paid to the tax office by four equal installments of
the probable income that is likely to be obtained the current year. If those prepaid taxes are lower than the final corporate tax, the
difference is paid until the beginning of April of the following year, if it is higher, then the difference is returned to the institution by
the tax authorities.
Kosovo
Corporate earnings are subject to income tax rate of 10% according to the Kosovo legislation. This ratio is applied to the tax base
that will be calculated as a result of the implementation of exemptions, deductions, addition of disallowable expenses, to the
income of corporations and that are calculated in accordance with the tax laws. Tax has to be paid in advance until April, July, October
and January of the current year and the 15
th
day of January of the following year by four installments. If those prepaid taxes are lower
than the final corporate tax, the difference is paid until the beginning of April of the following year, if it is higher, then the difference
is returned to the institution by the tax authorities
4. Transfer Pricing:
Transfer pricing is regulated through article 13 of Corporate Tax Law titled “Transfer Pricing through camouflage of earnings”.
Detailed information for the practice regarding the subject is found in the “General Communiqué Regarding Camouflage of Earnings
through Transfer Pricing”.
