TAXATION continued 2005 12 Full Audited Financial Statements w Notes

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

c. Tax expense - current continued ii. Tax decision letter dated December 31, 2004 revised the final income tax article 4 2 assessment from Rp542,846 to Rp40,594. iii. Tax decision letter dated December 31, 2004 revised the income tax article 21 assessment from Rp172,378 to Rp33,434. The bank filed an appeal against such decision for the above point ii iii on March 29, 2005, as the bank believe, that liability arising from the such tax assessment is less than amount stated on tax decision letter. In 2004, the Directorate General of Taxation conducted an audit on Bank Mandiri for the fiscal year 2003 for all taxes. On December 27, 2004, the Directorate General of Taxation issued tax assessments for underpayments of corporate income tax, income tax article 21, 22, 23, 4 2 final, 26 and value added tax and related penalties amounting to Rp35,128, Rp7,308, Rp2,659, Rp741, Rp871, Rp55 and Rp57, respectively. The Bank has paid all of such tax and penalties on December 30, 2004. Tax Losses Carried Forward Under current Indonesian tax regulations, tax losses may be carried forward and utilized to offset taxable income for up to 5 five years after the year in which the tax loss was incurred. Until December 31, 2004 Bank Mandiri has no tax losses that may be carried forward and utilized to offset taxable income. d. Tax expense-deferred The reconciliation between estimated income tax expense, calculated using applicable tax rates based on commercial profit before tax expense, and estimated income tax as reported in the statements of profit and loss for the years ended December 31, 2005 and 2004 are 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 Estimated income tax expense at standard statutory rates 342,833 2,228,892 Tax effect of permanent differences: Non-taxable incomenon-deductible expenses 126,622 116,602 Others 70,011 61,777 196,633 54,825 Tax expense - Bank Mandiri only 539,466 2,174,067 Tax expense – Subsidiaries 88,880 95,234 Tax expense – consolidated 628,346 2,269,301 Less: Current tax expense - consolidated 500,501 2,181,011 Tax Expense Deffered - Consolidated 127,845 88,290 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 84

27. TAXATION continued