Prepaid taxes December 31, December 31,

PT BANK MANDIRI PERSERO Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the year then ended Expressed in millions of Rupiah, unless otherwise stated 146

33. TAXATION continued d. Tax expense - current continued

The tax on Bank Mandiri and Subsidiaries Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits on the consolidated entities are follows: Year ended December 31, 2016 2015 Consolidated income before tax expense and noncontrolling interest 18,572,965 26,369,430 Tax calculated at applicable tax rates 4,010,865 5,368,896 Income tax effect of: Bank Mandiri - Income not subject to tax and final tax 213,279 503,341 - Expense not deductible for tax purposes 203,513 156,932 9,766 346,409 Subsidiaries 78,297 194,545 Total tax effect 88,063 151,864 Income tax expense 3,922,802 5,217,032 According to the taxation laws of Indonesia, Bank Mandiri and Subsidiaries submit the Annual Corporate Income Tax Returns to the tax office on the basis of self assessment. The Directorate General of Taxation may assess or amend taxes within 5 five years from time when the tax becomes due. Starting from 2009, Bank Mandiri has recognised written-off loans as deduction of gross profit by fullfiling the three requirements stipulated in UU No. 36 Year 2008 and Regulation of the Minister of Finance No. 105PMK.032009 dated June 10, 2009, which was amended by Regulation of the Minister of Finance No. 57PMK.032010 dated March 9, 2010. Based on UU No. 36 Year 2008 regarding Income Tax, Government Regulation No. 81 Year 2007 dated December 28, 2007 which is subsequently replaced by Government Regulation GR No. 77 Year 2013 dated November 21, 2013 and GR No.56 Year 2015 dated August 3, 2015 regarding Reduction of Income Tax Rate for Listed Resident Corporate Tax Payers and Regulation of the Minister of Finance No. 238PMK.032008 dated December 30, 2008 regarding Procedures for Implementing and Supervising the Granting of Reduction of Income Tax Rate for Listed Resident Corporate Tax payers, a public listed company can obtain a reduction of income tax rate by 5 lower from the highest income tax rate by fulfilling several requirements at least 40 of the total paid-up shares are listed and traded in the Indonesia Stock Exchange, the shares are owned by at least 300 parties and each party can only own less than 5 of the total paid up shares. The above requirements must be fulfilled by the tax payer at the minimum 183 one hundred and eighty three calendar days in a period of 1 one fiscal year. Tax payer should attach the certificate from Securities Administration Agency in the Annual Corporate Income Tax return by attaching form X.H.1-6 as regulated in Bapepam-LK Regulation No. X.H.1 for each respective fiscal year.