PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated
93
27. TAXATION continued
b. Corporate income tax expense
Eight-Months Four-Months
Year Ended Year Ended
Period Ended Period Ended
December 31, December 31,
December 31, April 30,
2004 2003
2003 2003
Corporate income tax expense - current: Bank Mandiri only
2,085,997 2,179,540
1,314,142 865,398
Subsidiaries 95,014
9,337 5,795
3,542 2,181,011
2,188,877 1,319,937
868,940
Corporate income tax expense benefit - deferred
Bank Mandiri only 88,070
257,709 586,199
328,490 Subsidiaries
220 1,128
338 790
88,290 256,581
585,861 329,280
2,269,301 2,445,458
1,905,798 539,660
As discussed in Note 2v, corporate 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. Corporate income tax expense - current The reconciliation between profit before corporate income tax as shown in the consolidated
statements of profit and loss and estimated income tax computations, and the related current income tax expense for Bank Mandiri and its Subsidiaries is as follows:
Eight-Month Four-Month
Year Ended Year Ended
Period Ended Period Ended
December 31, December 31,
December 31, April 30,
2004 2003
2003 2003
Consolidated profit before corporate income tax expense and minority interests
7,525,002 7,031,524
5,134,607 1,896,917
Less: Profit before corporate income tax of Subsidiaries after elimination
95,304 8,186
5,692 2,494
Profit before corporate income tax expense and minority interests - Bank Mandiri only
7,429,698 7,023,338
5,128,915 1,894,423
Adddeduct permanent differences: Non-taxable incomenon-deductible expenses
388,673 411,739
359,792 51,947
Non-deductible loan write-offs -
996,939 996,939
- Non-taxable adjustment of provision
for losses on earning assets other than loans -
200,984 167,027
33,957 Non-taxable adjustment of estimated losses
on commitments and contingencies -
63,494 38,589
102,083 Others
205,922 11,911
8,670 20,581
Adddeduct temporary differences: Allowable tax depreciation overunder
financial statement depreciation 49,616
27,234 414
27,648 Financial statement provision for personnel
expenses overunder allowable tax provision 160,715
361,007 567,530
206,523 Financial statement provision for losses on
earning assets other than loans overunder allowable tax provision
158,347 61,868
121,881 60,013
Financial statement provision for loan losses underover allowable tax provision
265,862 829,568
870,251 40,683
PT BANK MANDIRI PERSERO TBK. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2004 and 2003, and April 30, 2003 Expressed in millions of Rupiah, unless otherwise stated
94
27. TAXATION continued
c. Corporate income tax expense – current continued
Eight-Month Four-Month
Year Ended Year Ended
Period Ended Period Ended
December 31, December 31,
December 31, April 30,
2004 2003
2003 2003
Financial statement estimated losses on commitments and contingencies under
over allowable tax provision 9,620
639,594 916,804
277,210 Financial statement provision for losses arising
from legal cases underover allowable tax provision
228,783 611,028
448,268 162,760
Gainslosses on increase in market value of securities and Government recapitalization
bonds 58,747
1,493,066 727,386
765,680 Estimated taxable income
6,953,381 7,296,598
4,411,878 2,884,720
Less: Utilization of tax loss carried forward -
31,406 31,406
- Estimated taxable income after compensation
with tax loss carried forward 6,953,381
7,265,192 4,380,472
2,884,720 Estimated corporate income tax expense - current
Bank Mandiri only 2,085,997
2,179,540 1,314,142
865,398 Subsidiaries
95,014 9,337
5,795 3,542
Estimated corporate income tax expense - current
2,181,011 2,188,877
1,319,937 868,940
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 May 14, 2003, the Minister of Finance issued Decision Letter No. 211KMK.032003 dated
May 14, 2003 which stated that a taxpayer that undertakes an initial public offering that previously received assets transferred from legacy companies, and whose assets were valued at their
historical net book value by the legacy companies, can, as a result of a merger or business combination, also carry forward the benefit of any net accumulated tax losses from the legacy
companies for up to five years, provided that the taxpayer receives permission from the Minister of Finance to do so, and the taxpayer conducts a revaluation of all fixed assets using the market
value of such fixed assets as of the date of the merger or business combination. On May 21, 2003, the Minister of Finance, via letter No. S-206MK.012003 dated May 21, 2003
addressed to Bank Mandiri’s President Commissioner and President Director, approved the transfer and utilization of tax losses carried forward from the merged banks to the Bank subject to
revaluation of all applicable fixed assets dated July 31, 1999. Bank Mandiri engaged PT Vigers Hagai Sejahtera, an independent appraiser, to perform a
revaluation of premises and equipment received from legacy banks. The results were submitted to and approved by the Directorate General of Taxation through the Decision Letter of the Head of
State and Regional Offices of Corporate Tax Services No. KEP-01WPJ.07KP.01052003 dated June 18, 2003 Note 14a.
