TAV IT

TAV AIRPORTS HOLDING AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
AS AT AND FOR THE YEAR ENDED 31 DECEMBER 2008
(Amounts expressed in Euro unless otherwise stated)
Reconciliation of effective tax rate
The reported income tax expenses for the years ended 31 December 2008 and 2007 are different than the amounts computed by
applying the statutory tax rate to profit before income tax of the Group, as shown in the following reconciliation:
% 2008 % 2007
Profit/(loss) for the period 4,667,741 (43,836,419)
Total income tax benefit (3,434,844) (4,745,445)
Profit/(loss) before income tax 1,232,897 (48,581,864)
Income tax using the Company’s domestic tax rate 20 246,579 20 (9,716,373)
Tax effects of:
-not deductible expenses 192 2,372,905 (7) 3,378,573
-translation of non-monetary items according to IAS 21 (392) (4,838,522) (2) 1,202,662
-tax exempt income (538) (6,629,916) 8 (4,070,578)
-change in tax rate - 1 (626,746)
-translation effect on carried forward loss 318 3,924,632 4 (1,628,648)
-change in previously recognised tax losses 36 442,659 - -
-recognition of previously unrecognised tax losses (621) (7,655,056) - -
-current year losses which no deferred tax asset is recognised 409 5,042,452 (10) 4,753,864
-effect of different tax rates for foreign juristictions 195 2,404,499 - -
-other consolidation adjustments 102 1,254,924 (4) 1,961,801
Income tax benefit (279) (3,434,844) 10 (4,745,445)
Corporate tax:
The Turkish entities within the Group are subject to Turkish corporate taxes. Provision is made in the accompanying consolidated
financial statements for the estimated charge based on the each of the Group entities’ results for the year.
Corporate tax is applied on taxable corporate income, which is calculated from the statutory accounting profit by adding back
non-deductible expenses, and by deducting dividends received from resident companies, other exempt income and investment
incentives utilised.
In Turkey, advance tax returns are filed on a quarterly basis. The advance corporate income tax rate at 31 December 2008 is 20% (31
December 2007: 20%).
Losses can be carried forward for offsetting against future taxable income for up to 5 years. Losses cannot be carried back.
Georgian corporate income tax is levied at a rate of 20% on income less deductible expenses. Effective from 1 January 2008, the
corporate income tax rate has been reduced from 20% to 15%. As at 31 December 2007, deferred tax is calculated at a 15% tax rate
as applicable to the period when the asset is realised or the liability is settled.
Tunusian corporate income tax is levied at a rate of 30% on income less deductible expenses. According to concession agreement,
TAV Tunusie is exempt from corporate tax for a period of 5 years starting from the concession agreement date.
In Turkey, there is no procedure for a final and definitive agreement on tax assessments. Companies file their tax returns between
1-25 April following the close of the accounting year to which they relate. Tax authorities may, however, examine such returns and
the underlying accounting records and may revise assessments within five years.