12 Months Financial Report - Turkish Airlines

TÜRK HAVA YOLLARI ANONİM ORTAKLIĞINOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD ENDED 31 DECEMBER, 200935 TAX ASSETS AND TAX LIABILITIES (cont’d)1 January- 1 January-31 December 2009 31 December 2008Reconciliation of provision for taxes:Profit from operations before tax 736.977.617 1.305.465.938Domestic income tax rate of 20% 147.395.523 261.093.188Taxation effects on:- revenue that is exempt from taxation (2.846.785) (5.848.893)- foreign branch earning exemption 33.119.035 (87.285.760)- non-deductible expenses 233.564 3.281.192Provisions for tax expense in income statement 177.901.337 171.239.727Tax effect regarding other comprehensive income is as follows:1 January - 31 December 2009Amount Tax (expense) Amountbefore tax /income after taxForeign currency translation differences 181.933 - 181.933Change in cash flow hedge fund ( 2.189.161) 437.832 ( 1.751.329)Other comprehensive income for the period ( 2.007.228) 437.832 ( 1.569.396)Change in translation differences of foreign currency that is included in other comprehensive income, isTL 4.459.406. In addition, the effect on taxation does not exist for the period 1 January - 31 December2008.The Group recognizes deferred tax assets and liabilities based upon temporary differences arisingbetween its financial statements prepared in accordance with IFRS and its statutory financialstatements. Deferred tax assets and liabilities calculated for temporary differences expected to berealized in future are calculated under the liability method.57