TAXATION continued FS30Sep08EngFinal1

PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008, AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated 76

38. TAXATION continued

e. continued 2007 2008 Permanent differences: Net periodic post-retirement health care benefits costs 536,781 668,432 Amortization of goodwill - 180 Amortization of discounts on promissory notes 18,418 8,753 Equity in net income of associates and subsidiaries 6,390,070 6,021,928 Others 357,581 425,580 Total permanent differences 5,477,290 4,918,983 Taxable income 4,001,254 4,693,075 Corporate income tax expense 1,200,359 1,407,905 Final income tax expense 58,436 62,457 Total current income tax expense of the Company 1,258,795 1,470,362 Current income tax expense of the subsidiaries 3,935,795 3,516,696 Total current income tax expense 5,194,590 4,987,058 Calculation of corporate income tax liability above was in accordance with annual tax return submitted by the Company to the Tax Office. f. Tax assessment a. In 2006, Telkomsel was assessed for underpayments of withholding taxes and VAT self assessed including penalty, covering the fiscal year 2002 totaling Rp.129 billion and overpayment of corporate income tax of Rp.5 billion. The net underpayment of Rp.124 billion was settled through the use of the payment of income tax in 2003 of Rp.24 billion and a cash payment of Rp.100 billion. Of the Rp.100 billion cash payment, Telkomsel has filed an objection for Rp.99 billion. Of the net underpayment of Rp.105 billion, Rp.83 billion was charged to expense in 2006 with the remaining amount of Rp.22 billion recorded as part of its claims for tax refund. In 2007, part the Telkomsel’s objection covering fiscal year 2002 of Rp.185 million was accepted by the Tax Authorities through a cash refund of Rp.176 million and through netting off against the Telkomsel’s tax underpayments during the previous periods amounting to Rp.9 million. The remaining balance was rejected by the Tax Authorities. On October 2, 2007 Telkomsel filed an appeal with the Tax Court for rejection of withholding taxes Article 23 and 26 of Rp.21 billion Note 52b. Conservatively, the amount was charged to the consolidated statements of income. PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED continued SEPTEMBER 30, 2007 AND 2008, AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2007 AND 2008 Figures in tables are presented in millions of Rupiah, unless otherwise stated 77

38. TAXATION continued