PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31 DECEMBER 2009, 2008 AND 2007
Expressed in millions of Rupiah, unless otherwise stated
Appendix 5143 57. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued
d. Value Added Tax VAT on Bank Sharia Mandiri Murabahah Transactions
There is a difference in opinions concerning tax applied on murabahah transaction between the Directorate General Taxes DGT Tax Audit Team with the subsidiary, Bank Syariah Mandiri BSM.
The DGT Tax Audit Team concluded that murabahah transaction is subject to Value Added Tax VAT according to the Law No. 8 year 1983 regarding Value Added Tax on Goods and Services
and Sales Tax on Luxury Goods and the latest revision in Law No. 18 year 2000 article 1A paragraph 1. Related to this matter, the tax office issued a tax assessment letter confirming
underpayment SKPKB and tax collection letter STP of VAT for fiscal year 2003 for BSM’s head office and some branches totalling of Rp37,649.
On 10 January 2005 BSM submitted an objection and did not make payment on the above SKPKB and STP on the basis that, at that time, the tax regulation was not specifically address sharia
banking activities, especially murabahah financing transactions.
Based on Bank Indonesia Regulation No. 821PBI2006 dated 5 October 2006 Concerning Assets Quality Rating For Commercial Banks Conducting Business Based On Sharia Principles, and the
amendment of Bank Indonesia Regulation No. 1024PBI2008 dated 16 October 2008 it is stated that sale and purchase transaction in Murabahah Agreement is a financing transaction.
BSM concluded that murabahah is a banking transaction which is excluded from VAT object, according to the Law No. 8 year 1983 regarding Value Added Tax on Goods and Services and
Sales Tax on Luxury Goods and the latest revision in Law No. 18, 2000 article 4A paragraph 3 point d, it is stated that banking transaction is not a VAT object and this is also in accordance
with Government Regulation No. 144 year 2000 article 5 point d.
The Association of Bank Sharia Indonesia ASBISINDO concurred with BSM and on 3 August 2005 ASBISINDO submitted a letter No. 58KU-DPP08.05 to the DGT and requested that VAT
should not be imposed on financing under murabahah scheme by sharia banking.
On 1 December 2005 the Director General of Taxation issued a decision rejecting the BSM’s objection letter No. Kep-277PJ.542005.
Until this date, BSM is still in process to discuss and clarify this matter with ASBISINDO, Bank Indonesia and related financial institutions, however no conclussion has been made. Therefore,
until further clarification, BSM has not made any provision for the above SKPKB and STP for fiscal year 2003.
Based on newly issued Law No. 42 year 2009 in relation to the third amendment on Value Added Tax on Goods and Services and Sales Tax on Luxury Goods, it is stated that financing services,
which include sharia financing, is exempted from VAT. This Law is effective starting 1 April 2010.
e. Long Term Fund Borrowing from the Asian Development Bank ADB
On 30 October 2009, the Bank signed a long term Loan Facility Agreement with ADB of USD105,000,000 full amount which was amended and restated on 13 November 2009. The facility
is intended to improve Bank Mandiri funding structure.
The facility consists of two tranches, Tranche A is direct loan from ADB with tenor 7-year amounted USD75,000,000 full amount; and Tranche B, a 5-years loan amounted USD30,000,000 full
amount to be provided by ADB as Lender-of-Record and funded by commercial banks under Participation Agreements between ADB and such banks ADB Participant Banks.
