Top court approves İşbank’s appeal over tax conflict

ISTANBUL - Doğan News Agency

The Turkish Constitutional Court has approved Turkish İşbank’s appeal on a tax conflict with the tax authority and decided the amount of tax, penalties and default interest which was paid by the bank should be paid back to it as compensation with its legal interest.

“A probe has been made by the inspectors of the Tax Inspection Board into İşbank’s Supplementary Pension Fund, which was founded as per the provisions of the Turkish Commercial and Civil Codes, regarding the payments which fulfill İşbank’s liabilities within the framework of the Articles of Foundation of the Pension Fund and the relevant legislation,” İşbank said in its announcement to the Public Disclosure Platform (KAP) Feb. 23.

“As a result of this investigation, tax audit reports were prepared for the years 2007, 2008, 2009, 2010 and 2011, claiming the aforementioned liabilities should be taxed in terms of wage base and should thus be subject to withholding tax and stamp duty and it was announced the bank would use its legal rights against the related tax assessments,” the bank said.

The bank said, as considering one of its applications, the Constitutional Court made its decision amounting to 39,378 Turkish Liras, that there were no predictability in legal conformity for taxing the bank’s contributions to the Pension Fund in terms of wage base and for the reason it was accepted the bank’s property right had been violated according to the 35th article of Constitution.

“Finally, the court decided the amount of tax, penalties and default interest which was paid by the bank should be paid back to it as compensation with its legal interest,” İşbank said.

According to the Court’s decision, it is expected the cases related to the periods 2007, 2008, 2009, 2010 and 2011 would conclude in favor of the Bank, İşbank said.

“In this context, the provisions amounting to 207.4 million liras which had been allocated for the mentioned years could be reversed. The path to be followed for other provisions, allocated for the same reason within the scope of accounting standards for the year 2012 and subsequent periods, will be determined depending on the process,” the bank said.