PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three months ended March 31, 2007 and 2006 Expressed in rupiah, unless otherwise stated
29
11. TAXATION continued
In March 2007, the Company received a decision letter from the Tax Office wherein the Tax Office approved to refund the claim for 2005 income tax and increased the 2005 taxable income by
Rp16,328,657,367. Out of the said total amount of assessment, Rp5,292,461,212 will be contested by the Company. In addition, the Company also received withholding tax Article 26 and value added
tax assessments for 2005, whereby, according to the Tax Office, the Company has to pay additional taxes and penalties totalling Rp8,916,678,829. The Company will contest the result of the tax
assessments. In March 2006, the Company received a decision letter from the Tax Office wherein the Tax Office
approved to refund the claim for 2004 income tax and increased the 2004 taxable income to Rp57,969,361,654. The difference of Rp6,359,790,385 between the amount of taxable income
approved by the Tax Office and the amount reported was recognized as an adjustment to the Company’s tax loss carryforward in 2006.
In December 2006, DAP received a decision letter from the Tax Office wherein the Tax Office approved to refund DAP’s 2005 claim for tax refund amounting to Rp5,849,231,775.
In April 2006, DAP received a decision letter from the Tax Office wherein the Tax Office approved to refund DAP’s 2003 claim for tax refund amounting to Rp3,824,659,200, out of the total claim of
Rp3,830,534,868.
In March 2006, DAP received a decision letter from the Tax Office wherein the Tax Office approved to refund DAP’s 2004 claim for tax refund amounting to Rp2,946,642,366, out of the total claim of
Rp2,991,878,166.
In February 2004, DAP received a decision letter from the Tax Office wherein the Tax Office approved to refund DAP’s 2002 claim for tax refund amounting to Rp6,195,133,712, out of the total
claim of Rp11,605,908,212. DAP has contested the result of the tax assessment and the disapproved portion of the claim has remained as part of “Prepaid Taxes” in the 2005 consolidated
balance sheet. Furthermore, on August 16, 2006, the Tax Court issued a decision in favor of DAP and the refund was received by DAP in October 2006. The Tax Office, however, asked for a judicial
review by the Supreme Court. As of March 31, 2007, the Supreme Court has not rendered any decision on the matter.
e. The reconciliation between income before corporate income tax expense after the reversal of inter- company eliminating entries during consolidation multiplied by the applicable tax rate and
corporate income tax expense as shown in the consolidated statements of income for the three months ended March 31, 2007 and 2006 is as follows:
2007 2006
Income before corporate income tax expense 164,168,375,145
241,713,281,937 Reversal of inter-company eliminating entries
during consolidation 120,889,062
919,478,085 Combined income, net of loss, before income tax
of the Company and Subsidiaries 164,047,486,083
240,793,803,852
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three months ended March 31, 2007 and 2006 Expressed in rupiah, unless otherwise stated
30
11. TAXATION continued 2007
