Milli Re 2025 Annual Report

With the Law No. 7571 published in the Official Gazette on December 25, 2025, a provisional Article 37 was added to the Tax Procedure Law, stipulating that for the 2025 fiscal period, including interim tax periods, as well as the 2026 and 2027 fiscal periods, regardless of whether the conditions for inflation adjustment have been met, tax base financial statements will not be subject to inflation adjustment. For the purposes of the revaluation practice specified in paragraph (ç) of Article 298 (repeated), the periods stated to not require inflation adjustment will be considered as periods during which inflation adjustment conditions have not been met. Following this regulation, it has become possible to perform revaluation under paragraph (ç) of Article 298 (repeated) of the Tax Procedure Law. As a result, the Company and its subsidiary Miltaş have opted to perform revaluation for certain fixed asset items specified in their tax calculations as of December 31, 2025.  In September 2023, the Public Oversight, Accounting and Auditing Standards Authority (KGK) published amendments to TMS 12, introducing a mandatory exception for the recognition and disclosure of deferred tax assets and liabilities related to Pillar Two income taxes. These amendments clarify that TMS 12 will apply to income derived from tax laws that have either come into effect or are close to coming into effect for the purpose of implementing the Pillar Two Model Rules published by the Organisation for Economic Co-operation and Development (OECD). Additionally, these changes introduce certain disclosure requirements for businesses affected by such tax laws. The exception indicating that information regarding deferred taxes within this scope will not be recognized or disclosed will come into effect upon the publication of the amendment. The Pillar Two regulations, which were agreed upon by OECD member countries, came into effect in Turkey through the Law No. 7524 on Amendments to Tax Laws and Certain Laws published in the Official Gazette dated August 2, 2024. Although no secondary regulations have been published regarding this matter, preliminary assessments made based on the guidelines issued by the OECD suggest that the aforementioned regulations are not expected to have any impact on financials. Nevertheless, legislative changes in Turkey and other countries where operations are conducted are being monitored. The laws published in the Official Gazette dated August 2, 2024, have enacted a Domestic Minimum Corporate Tax, which will be applied starting from the 2025 accounting period. With the Law No. 7524, the minimum corporate tax mechanism has been introduced, stipulating that the calculated corporate tax cannot be less than 10% of the taxable corporate income before deductions and exemptions. This regulation will come into effect on the date of its publication to apply to corporate profits for the taxation period of 2025. Additionally, General Communiqué No. 23 on Corporate Tax related to this matter has been published. The domestic minimum corporate tax will be effective for tax periods beginning in 2025 and thereafter. Based on the calculations, the Group does not have any additional tax liability under the domestic minimum interim tax framework. Transfer pricing In Turkey, the transfer pricing provisions have been stated under the Article 13 of Corporate Tax Law with the heading of “disguised profit distribution via transfer pricing”. The General Communiqué on disguised profit distribution via Transfer Pricing, dated November 18, 2007 sets details about implementation. If a taxpayer enters into transactions regarding sale or purchase of goods and services with related parties, where the prices are not set in accordance with arm’s length principle, then related profits are considered to be distributed in a disguised manner through transfer pricing. Such disguised profit distributions through transfer pricing are not accepted as tax deductible for corporate income tax purposes. Deferred tax In accordance with TAS 12 - Income taxes , deferred tax assets and liabilities are recognized on all taxable temporary differences arising between the carrying values of assets and liabilities in the financial statements and their corresponding balances considered in the calculation of the tax base, except for the differences not deductible for tax purposes and initial recognition of assets and liabilities which affect neither accounting nor taxable profit. Deferred tax assets and liabilities are reported as net in the financial statements if, and only if, the Company has a legally enforceable right to offset current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity. 238 MİLLÎ REASÜRANS 2025 Annual Report Notes to the Consolidated Financial Statements As of December 31, 2025 Millî Reasürans Türk Anonim Şirketi (Currency: Turkish Lira (TRY)) (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish)