PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated
81
27. TAXATION continued
b. Tax expense
2006 2005
Tax expense - current: Bank Mandiri only
1,086 -
Subsidiaries 21,502
44,133 22,588
44,133
Tax expense benefit - deferred Bank Mandiri
338,333 306,675
Subsidiaries 1,732
1,425 340,065
305,250 362,653
349,383
As discussed in Note 2v, income tax for Bank Mandiri and its Subsidiaries is computed for each company as a separate legal entity consolidation is not permitted for corporate income tax filing purposes.
c. Tax expense - current The reconciliation between profit before tax expense as shown in the consolidated statements of profit
and loss and estimated income tax computations, and the related current tax expense for Bank Mandiri and its Subsidiaries is as follows:
2006 2005
Consolidated profit before tax expense and minority interests
1,178,093 965,429
Less: Profit before tax expense of Subsidiaries after elimination
23,596 42,947
Profit before tax expense and minority interests - Bank Mandiri only
1,154,497 922,482
Adddeduct permanent differences: Non-taxable incomenon-deductible expenses
79,082 31,199
Loans write-offs transfer to DJPLN 6,121
274,699 Others
62,159 343,267
Adddeduct temporary
differences: Under depreciation of fixed assets per commercial
over depreciation per fiscal 8,859
33,611 Financial statement provision for personnel
expenses under allowable tax provision -
14,899 Financial statement provision for losses on
earning assets other than loans underover allowable tax provision
627,566 743,648
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated
82
27. TAXATION continued
c. Tax expense - current continued
2006 2005
Under provision for loans losses per commercial to allowable tax provision
313,946 2,447,248
Underover provision for estimated losses on commitments and contingencies per commercial
to allowable tax provision 53,397
100,574 Under provision for losses arising
from legal cases per commercial to allowable tax
provision 90,202
368,348 Gains on increase in market value of
securities and Government recapitalization bonds
33,807 3,222
Estimated taxable incomeloss 3,676
1,000,857 Estimated tax expense - current
Bank Mandiri only 1,086
- Subsidiaries
21,502 44,133
Estimated tax expense – current 22,588
44,133
Under the Indonesian taxation laws, Bank Mandiri and its Subsidiaries submit tax returns on the basis of self-assessment. The tax authorities may assess or amend taxes within 10 years after the date of the tax
filings.
Tax Decisions and Tax Assessments On October 29, 2003, Bank Mandiri received tax assessment letters dated October 24, 2003 regarding
BDN tax audits for the period of January 1, 1999 up to July 31, 1999. Based on the assessment letters, BDN had tax underpayments amounting to Rp717,229 which consisted of income tax article 21
of Rp172,378, income tax article 23 of Rp301, value added tax VAT of Rp1,501,final income tax article 4 2 of Rp542,846 and a VAT tax collection letter for an amount of Rp203. On January 13,
2004, the Bank submitted an objection letter to the tax office regarding such tax assessment letters and the Director General of Taxation DGT approved most of the Bank’s objections by issuing tax decision
letters as follows: i.
Tax decision letter dated August 24, 2004 revised the value added tax assessment from Rp1,501 to Rp1,062. The Bank filed an appeal against such decision to the tax court on November 11,
2004. On October 28, 2005 the tax court issued Tax Court Decisions No.Put.06848PPM.VI162005, which approved most of the bank’s appeal. On November 23,
2005 DGT issued decision letter No. KEP-002WPJ.07KP.01032005 regarding Implementation of tax court decision which revised VAT underpayment from Rp1,062 to Rp507. Bank had agreed
and paid for the tax underpayment.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six Months Ended June 30, 2006 Unaudited and 2005 Audited Expressed in millions of Rupiah, unless otherwise stated
83
27. TAXATION continued
