MILLI_RE_ANNUAL REPORT 2022

2.15 Insurance contracts and investment contracts with discretionary participation feature Discretionary participation feature (“DPF”) within insurance contracts and investment contracts is the right to have following benefits in addition to the guaranteed benefits. (i) that are likely to comprise a significant portion of the total contractual benefits, (ii) whose amount or timing is contractually at the discretion of the Issuer; and (iii) that are contractually based on: (1) the performance of a specified pool of contracts or a specified type of contract; (2) realized and/or unrealized investments returns on a specified pool of assets held by the Issuer; or (3) the profit or loss of Company, fund or other entity that issues the contract. As of balance sheet date, the Group does not have any insurance or investment contracts that contain a DPF. 2.16 Investment contracts with discretionary participation feature As of the reporting date, the Group does not have any insurance contracts and investment contracts without discretionary participation feature. 2.17 Liabilities Financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another entity. Financial liabilities of the Group are measured at their discounted values. A financial liability is derecognized when it is extinguished. 2.18 Income taxes Corporate tax The corporate tax rate in Turkey is 20%. The corporate tax rate is applied to the net corporate income to be found as a result of adding the expenses that are not accepted as deductible in accordance with the tax laws to the commercial income of the corporations, and deducting the exceptions and deductions in the tax laws. No further tax is paid if the profit is not distributed. With the amendment made in the first paragraph of the 25 th article of the Law No. 7394 dated April 15, 2020 and the 32 nd article of the Law No. 5520 titled “Corporate Tax and Provisional Tax Rate”; It has been decreed that the corporate tax rate be applied as 25% on the corporate earnings of banks, financial leasing, factoring, financing and savings financing companies, electronic payment and money institutions, authorized foreign exchange institutions, asset management companies, capital market institutions, insurance and reinsurance companies and pension companies. In addition, Article 26 of the same Law regulates that the aforementioned 25% rate can be applied in the 2022 calendar year, starting from the declarations that must be submitted as of July 1, 2022 and being valid for the corporate earnings for the taxation period starting from February 1, 2022. There is no withholding tax on profit shares (dividends) paid to institutions that generate income through a workplace or permanent representative in Turkey and to institutions residing in Turkey. 10% withholding tax is applied on dividend payments made to institutions other than these. In the application of withholding tax rates for profit distributions to non-resident companies and real persons, the practices included in the relevant Double Taxation Agreements are also taken into consideration. Addition of profit to capital is not considered as profit distribution and withholding tax is not applied. Provisional taxes are paid by calculating at the corporate tax rate to which the earnings of that year are subject. Provisional taxes paid during the year can be deducted from the corporate tax calculated on the annual corporate tax return of that year. There is no practice in Turkey to reach an agreement with the tax authority regarding the taxes to be paid. Corporate tax returns are submitted to the relevant tax office until the evening of the last day of the fourth month following the month in which the accounting period is closed. However, the tax inspection authorities can examine the accounting records within five years, and if an incorrect transaction is detected, the tax amounts to be paid may change. In the Turkish tax system, financial losses can be deducted from the financial profits in the following five years, and it is not possible to deduct (retrospectively) from previous years’ earnings. 203 MİLLİ RE 2022 ANNUAL REPORT Notes to the Consolidated Financial Statements As of December 31, 2022 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TL)) Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1 RISKS AND ASSESSMENT OF THE GOVERNING BODY UNCONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON CONSOLIDATED FINANCIAL STATEMENTS TOGETHER WITH INDEPENDENT AUDITORS’ REPORT THEREON FINANCIAL STATUS