The amount of any cash distribution paid in Rupiah should equal the US Dollar value of such Rupiah on the
date of receipt of the distribution, regardless of whether the Rupiah are actually converted into US Dollar at that
time. Gain or loss, if any, recognized on a subsequent sale, conversion, or other disposition of Rupiah generally
will be US source ordinary income or loss. Dividends received on the ADSs or common stock will generally
not be eligible for the dividends received deduction allowed to corporations.
Dividends generally will be treated as income from foreign sources for US foreign tax credit purposes. A
US Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any
foreign withholding taxes imposed on dividends received on ADSs or common stock. A US Holder who does not
elect to claim a foreign tax credit for foreign tax withheld, may instead claim a deduction, for US federal income
tax purposes, in respect of such withholdings, but only for a year in which such holder elects to do so for all
creditable foreign income taxes.
3. Sale or Other Disposition of ADSs or Common Stock A US holder will generally recognize capital gain or loss
upon the sale or other disposition of ADSs or common stock in an amount equal to the difference between the
amount realized upon the disposition and the holder’s adjusted tax basis in such ADSs or common stock. Any
capital gain or loss will be long-term if the ADSs or Common Stock have been held for more than one year
and will generally be US source gain or loss for US foreign tax credit purposes. The deductibility of a capital loss
is subject to limitations.
4. PFIC Considerations If we were to be classified as a PFIC in any taxable year,
a US Holder would be subject to special rules generally intended to reduce or eliminate any benefits from the
deferral of US federal income tax that a US Holder could derive from investing in a non-US company that does
not distribute all of its earnings on a current basis. In such event, a US Holder may be subject to tax at ordinary
income tax rates on i any gain recognized on the sale of ADSs or common stock and ii any “excess distribution”
paid on ADSs or common stock generally, a distribution in excess of 125 of the average annual distributions
paid by us in the three preceding taxable years. In addition, a US Holder will be subject to an interest charge
on such gain or excess distribution. Finally, the 15 maximum rate on Company dividends would not apply
if we become classified as a PFIC. Each US Holder is urged to consult its tax advisor regarding the potential
tax consequences to such holder if we are or become classified as a PFIC, as well as certain elections that may
be available to mitigate such consequences.
5. Backup Withholding Tax and Information Reporting Requirements
US backup withholding tax and information reporting requirements generally apply to certain payments to
certain non corporate holders of stock. Information reporting generally will apply to payments of dividends
on and to proceeds from the sale or redemption of, ordinary shares made within the US or by a US pay or
US middleman to a holder of ordinary shares other than an “exempt recipient,” including a corporation, a payee
that is not a US person that provides an appropriate certification and certain other persons. A payor will be
required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the
sale or redemption of, ADSs or common stock within the US or by a US payor or US middleman to a holder,
other than an exempt recipient, if such holder fails to furnish its correct taxpayer identification number or
otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements. The
backup withholding tax rate is 25 for years through 2014. The backup withholding tax is not an additional
tax and may be credited against a US holder’s regular US federal income tax liability or, if in excess of such
liability, refunded by the Internal Revenue Service “IRS” if a timely refund claim is filed with the IRS. Copies of
any information returns or tax returns for claims for refund filed by non-US Holders with the IRS may be
made available by the IRS, under the provisions of a specific treaty or other agreement providing for information
exchange, to the taxing authorities of the country in which a non-US Holder resides.
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PT Telkom Indonesia Tbk Persero
IMPACT OF THE REGULATION CHANGES TOWARDS THE COMPANY
The framework for the telecommunications industry is comprised of specific laws, government regulations,
ministerial regulations and ministerial decrees enacted and issued from time to time. The current
telecommunications policy was first formulated and articulated in the Government’s “Blueprint of the
Indonesian Government’s Policy on Telecommunications”, contained in MoC Decree No.KM.721999 dated September
17, 1999.
1. Telecommunications Law
The telecommunications sector is primarily governed by Law No.36 of 1999 “Telecommunications Law”,
which became effective on September 8, 2000. The Telecommunications Law sets guidelines for industry
reforms, including industry liberalization, facilitation of new entrants and enhanced transparency and competition.
The Telecommunications Law eliminated the concept of “organizing entities” thereby ending our and Indosat’s
responsibility for coordinating domestic and international telecommunications services, respectively. To enhance
competition, the Telecommunications Law prohibits monopolistic practices and unfair competition among
telecommunications operators.
The Telecommunications Law was implemented through several Government Regulations, Ministerial Regulations
and Ministerial Decrees. The most important of such regulations include:
Government Regulation No.522000 regarding Telecommunications Services.
MoCI Regulation No.1PERM.KOMINFO012010 dated January 25, 2010 regarding Operation of
Telecommunications Networks. MoC Decree No.KM.212001 regarding the Provision
of Telecommunications Services that was most recently amended by MoCI Regulation No.82015
regarding the Fourth Amendment of Decree of the Minister of Communication No.KM.212001 regarding
the Provision of Telecommunications Services.
MoC Decree No.332004 regarding Supervision of Healthy Competition in the Provision of Fixed Network
and Basic Telephony Services. MoC Decree No.KM.42001 dated January 16, 2001
regarding the Determination of Fundamental Technical Plan National 2000 for National Telecommunications
Development most recently amended by MoCI Regulation No.09PERM.KOMINFO062010 dated
June 9, 2010 regarding the sixth amendment of MoC Decree No.KM.42001 regarding the Determination
of Fundamental Technical Plan National 2000 for National Telecommunications Development.
2. Telecommunications Regulators
In February 2005, the authority to regulate the telecommunications industry was transferred from the
MoC to a newly-established Ministry, the MoCI. Pursuant to authorities assigned to him through Telecommunication
Law, the Minister of Communication and Information sets policies, regulates, supervises and controls
telecommunications industry in Indonesia. On October 28, 2010, MoCI engaged in certain organizational and
administrative reforms that included transferring licensing and regulatory authority to two newly established general
directorates, the Directorate General of Posts and Informatics Resources and Equipment “DGRE” and
Directorate General of Post and Informatics Operations “DGPIO” pursuant to MoCI Regulation No.17PERM.
KOMINFO102010 regarding the Organization and Administration of Ministry of Communication and
Information. Following the reforms, certain adjustments were made through MoCI Regulation No.15PERM.
KOMINFO062011 dated June 20, 2011 regarding title adjustments in a number of Decrees andor MoCI
regulations that regulate Special Materials in Post and Telecommunications andor in Decrees of the Director
General of Posts and Telecommunications, which transfer all substances related to the postal and telecommunications
sectors to the DGPIO including licensing, numbering, interconnection, universal service obligation and business
competition. Meanwhile, matters related to radio frequency spectrum and standardization of telecommunications
equipments were transferred to the DGRE.
Following the enactment of the Telecommunications Law, the MoC established an independent regulatory
body as stipulated in MoC Decree No.KM.312003 dated July 11, 2003 regarding the Establishment of the ITRA
which was later revoked by MoC Regulation No.KM.36 PERM.KOMINFO102008 dated October 31, 2008 and
amended by MoCI Regulation No.1PERM. KOMINFO022011 dated February 7, 2011 “MoCI
Regulation No.362008”. Pursuant to MoCI Regulation No.362008, the ITRA was assigned the authority to
regulate the Indonesian telecommunication industry, including the provision of telecommunication networks
and services. The ITRA which is chaired by the Director General of Post and Informatics Operations and comprises
of nine members, including six members of the public,
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2014 Annual Report
PT Telkom Indonesia Tbk Persero
FINANCIAL AND PERF
ORMANCE HIGHLIGHT
MANA GEMENT
REPOR T
PREF A
GENERAL INF
ORMA TION OF
TELK OM INDONE
SIA
MANA GEMENT’S DISCUSSION
AND ANAL Y
SIS
CORPORA TE GO
VERNANCE
SOCIAL AND ENVIRONMENT
AL
RE SPONSIBILITY
APPENDICE S
