PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated
81
27. TAXATION continued
b. Tax expense
2005 2004
Tax expense - current: Bank Mandiri only
403,244 2,085,997
Subsidiaries 97,257
95,014 500,501
2,181,011
Tax expense benefit - deferred Bank Mandiri only
136,223 88,070
Subsidiaries 8,378
220
127,845 88,290 628,346
2,269,301
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:
2005 2004
Consolidated profit before tax expense and minority interests
1,232,553 7,525,002
Less: Profit before tax expense of Subsidiaries after elimination
89,717 95,304
Profit before tax expense and minority interests - Bank Mandiri only
1,142,836 7,429,698
Adddeduct permanent differences: Non-taxable incomenon-deductible expenses
422,074 388,673
Others 233,370
205,922 Adddeduct
temporary differences:
Under depreciation of fixed assets per commercial over depreciation per fiscal
96,839 49,616
Financial statement provision for personnel expenses over allowable tax provision
364,807 160,715
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated
82
27. TAXATION continued
c. Tax expense - current continued
2005 2004
Financial statement provision for losses on earning assets other than loans over
allowable tax
provision 610,993
158,347 Under provision for loan
Losses per commercial over allowable provision per fiscal 1,162,641
265,862 Difference in net realizable value of repossessed collateral
over asset value based on tax 10,451
- Difference in net realizable value of abandoned property
over asset value based on tax 31,064
- Under provision for estimated losses on
commitments and contingencies per commercial over allowable tax provision
3,106 9,620
Under provision for losses arising from legal cases per commercial over allowable
tax provision
280,001 228,783
LosesGains on increase in market value of securities and Government recapitalization
bonds 71,196
58,747 Estimated taxable income
1,344,204 6,953,381
Estimated tax expense - current Bank Mandiri only
403,244 2,085,997
Subsidiaries 97,257
95,014
Estimated tax expense – current 500,501
2,181,011
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 Nopember 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.
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years Ended December 31, 2005 and 2004 Expressed in millions of Rupiah, unless otherwise stated
83
27. TAXATION continued
