Financial Position A&T Finansal Kiralama A.Ş. Annual Report 2024 94 95 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) A&T FİNANSAL KİRALAMA A.Ş. A&T FİNANSAL KİRALAMA A.Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 A& FİNANSAL KİRAL MA A. Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) 35 17– TAX ASSETS AND LIABILITIES 31 December 2024 31 December 2023 Corporation tax 4,245,643 834,935 VAT to be paid 3,939,695 2,767,674 Income tax payable 962,166 599,224 Social insurance premiums to be paid 165,718 339,250 Stamp tax to be paid 87,109 57,740 Total 9,400,331 4,598,823 Corporate tax The company is subject to corporate tax valid in Turkiye. In accordance with the 11 and 14th articles of the Law numbered 7316 on “Amendment of Law on Collection Procedure of Public Receivables and Certain Laws” published in the Official Gazette dated April 22, 2021 and numbered 31462, corporate tax rate will be applied as 25% for enterprises' corporate income belonging to the taxation periods of 2021 and 23% for enterprises' corporate income belonging to the taxation periods of 2022. Standard corporate tax rate for financial sector is increased to 25% starting from the declarations as of July 1, 2022 and to be valid for the taxation periods of 2022 according to the Law numbered 7394 published in the Official Gazette No. 31810 dated April 15, 2022. In accordance with the Law numbered 7456 which is published in Official Gazette dated July 15, 2023 and numbered 32249, corporate tax rate is increased to 30% for banks starting from the declarations of October 1, 2023 and to be valid for the taxation periods from January 1, 2023. Dividends paid to non-resident corporations, which have a place of business in Türkiye or to resident corporations are not subject to withholding tax. Otherwise, dividends paid are subject to withholding tax at the rate of 10%. An increase in capital via issuing bonus shares is not considered as profit distribution and no withholding tax incurs in such a case. In accordance with the Corporate Tax Law, three quarterly temporary corporate tax statements are submitted in total in the first nine months of reporting year. Advance tax is declared and paid by the 17th day of the second month following each calendar quarter end. Advance tax paid by corporations for the current period is credited against the annual corporation tax calculated on the annual corporate income in the following year. Despite the offset, if there is temporary prepaid tax remaining, this balance can be refunded or used to offset any other financial liabilities to the government. A 75% portion of the capital gains derived from the sale of equity investments and 50% portion of the capital gains derived from immovable properties held for at least two years is tax exempt, if such gains are added to paid-in capital or held in a special account under shareholder’s equity for five years. In accordance with the Law numbered 7456 which is published in the Official Gazette dated July 15, 2023 and numbered 32249, the tax exemption on profits from the sales of immovables has been terminated as of July 15, 2023. For immovables that were a part of company’s assets before the date of July 15, 2023, the exemption rate on profits arising from their sales has been set as 25%. Under the Turkish Corporate Tax Law, losses can be carried forward to offset against future taxable income for up to five years. Losses cannot be carried back to offset profits from previous periods. A& FİNANSAL KİRAL MA A. Ş. NOTES TO THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2024 (Amounts expressed Turkish lira (“TL”) unless otherwise indicated.) 36 17– TAX ASSETS AND LIABILITIES (Continued) Non-monetary items on the financial statements must have been restated for inflation according to the repeated article 298/A of Tax Procedure Law. In law numbered 7352 published on 20 January 2022 in the Official Gazette numbered 31734, 2021 and 2022 accounting periods including advance tax periods are deemed as the periods in which the requirements for inflation adjustment are not met. In the fiscal year of 2023, quarterly advance tax periods were not subject to inflation adjustment, but the financial statements prepared in accordance with Tax Procedure Law as of December 31, 2023 are subject to inflation adjustment regardless of whether the conditions for inflation adjustment are met. The profit/loss difference arising from inflation adjustment is recognized in retained earnings and has no effect on the corporate tax base. Current period net profit and tax liabilities for the accounting periods ending on 31 December 2024 and 31 December 2023 are as follows: 31 December 2024 31 December 2023 Corporation tax expense 11,594,873 2,943,425 Minus: Prepaid taxes (7,349,231) (2,108,490) Current income tax liability (net) 4,245,642 834,935 Tax expense 1 January – 31 December 2024 1 January – 31 December 2023 Current period corporate tax expense (11,594,873) (2,943,425) Deferred tax income / (expense) effect 5,871,711 10,289,937 Total 5,723,162 7,346,512 The reconciliation of the current year tax expense and the tax expense calculated using the Company's legal tax rate is as follows: 1 January – 31 December 2024 1 January – 31 December 2023 Pre-tax profit 30,087,546 12,145,030 Tax expense with a 30% tax rate (9,026,264) (3,643,509) Disallowable expenses (1,011,707) (736,463) Other (additions) / discounts 4,314,809 11,726,484 Current year tax expense (5,723,162) 7,346,512 Deferred taxes The company, an asset or liability's book value and for taxable temporary differences arising between the tax basis is determined in accordance with tax legislation “Income Related to Tax Turkiye Accounting Standards” (“TAS 12”) to calculate deferred taxes in accordance with the provisions and accounts. In the deferred tax calculation, the enacted tax rates that are valid as at the balance sheet date are used in accordance with the tax legislation in force. Calculated deferred tax assets and deferred tax liabilities are shown as offset in the financial statements.
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