CELEBİ 2021 ANNUAL REPORT

123 Çelebi Ground Handling Inc. 2022 Annual Report NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 DECEMBER 2022 ÇELEBİ HAVA SERVİSİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES (Amounts expressed in Turkish Lira (“TL”) unless otherwise indicated.) Turkish tax legislation does not permit a parent company, its subsidiaries, to file a tax return on its consolidated financial statements. Therefore, the tax liabilities of the Group’s consolidated financial statements are calculated separately for all companies included in the scope of consolidation. In Turkey, the corporate tax rate is 23% (It will be 20% in 2023 and beyond) (31 December 2021: 25%). The corporate tax rate is applied to the net corporate income to be deducted from deduction of exemptions and reductions in tax laws and an addition of expenses not subject to deduction according to tax legislation. The corporate tax rate in force in Hungary is 9% effective as of 1 January 2018. In India, the corporate tax rate is 25,17% for fiscal year 2022 (2021: 34,6% - 25,7%). The corporate tax rate is applicable on the total income of companies after adjusting for certain disallowable expenses, income tax exemptions (affiliation privilege, investment allowance exemption, etc.) and income tax deductions (such as research and development expenses). In Germany, the corporate tax rate is 31,925% for fiscal year 2022 (2021: 31,925%). The corporate tax rate is applicable on the total income of companies after adjusting for certain disallowable expenses, income tax exemptions (affiliation privilege, investment allowance exemption, etc.) and income tax deductions (such as research and development expenses). For the periods ended on 31 December 2022 and 2021, tax expenses are as follows: 1 January - 1 January - 31 December 2022 31 December 2021 - Current period corporate tax (300.775.570) (60.961.994) - Deferred tax income/(expense) (1.961.132) (4.150.508) (302.736.702) (65.112.502) Reconciliation of tax expenses presented in consolidated statements of income for the periods ended 31 December 2022 and 2021 are as follows: 2022 2021 Profit before tax in the financial statements 1.456.726.864 630.035.899 Expected tax expense according to parent company tax rate (335.047.195) (157.508.973) Differences in tax rates of subsidiaries (13.064.791) (1.635.997) Expected tax expense of the Group (348.111.986) (159.144.970) Non-deductible expenses (9.287.931) (11.735.833) Reductions 139.084 27.855.134 Offset previous year profit loss 15.453.227 49.503.059 Tax incentive effect (*) 72.045.579 2.230.859 Investments accounted using the equity method effect (1.843.208) 1.101.115 Deferred tax income calculated over unused previous years’ losses 3.219.679 2.350.173 The effect of non-temporary differences - 54.025.854 Effect of non-monetary items translated from TL to Euro under TAS 21 (36.596.852) (27.165.395) Other 2.245.706 (4.132.498) Current period tax expense of the Group (302.736.702) (65.112.502) (*) The Company was entitled to receive a corporate income tax incentive from the Ministry of Economy for its investments in Istanbul Airport.