TAXATION FS English 2017final

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 68

26. TAXATION continued

d. The components of income tax expense benefit are as follows continued: The reconciliation between the profit before income tax and the estimated taxable income of the Company for the six months period ended June 30, 2017 and 2016 is as follows: 2017 2016 Profit before income tax 23,255 19,498 Add back consolidation eliminations 11,001 9,374 Consolidated profit before income tax and eliminations 34,256 28,872 Less: profit before income tax of the subsidiaries 22,302 18,554 Profit before income tax attributable to the Company 11,954 10,318 Less: income subject to final tax 227 373 11,727 9,945 Temporary differences: Provision for personnel expenses 602 185 Net periodic pension and other post-retirement benefits costs 349 360 Deferred installation fee 54 12 Depreciation and gain on sale of property and equipment 1,177 595 Provision for onerous contracts 23 22 Finance leases 4 23 Provision for impairment and trade receivables written-off 211 41 Early retirement allowance expenses - 200 Other provisions 33 11 Net temporary differences 1,217 203 Permanent differences: Employee benefits 117 112 Net periodic post-retirement health care benefit costs 151 90 Donations 92 89 Equity in net income of associates and subsidiaries 10,663 9,388 Others 208 90 Net permanent differences 10,095 9,007 Taxable income of the Company 415 735 Current corporate income tax expense 83 148 Final income tax expense 33 67 Total current income tax expense of the Company 116 215 Current income tax expense of the subsidiaries 5,415 4,657 Total current income tax expense 5,531 4,872 Tax Law No. 362008 which is futher regulated in government regulation No.812007 as amended by government regulation No.772013 and lastly by government regulation No.562015 stipulates a reduction of 5 from the top rate applicable to qualifying listed companies, for those whose stocks are traded in the IDX which meet the prescribed criteria that the public owns 40 or more of the total fully paid and traded shares, and such shares are owned by at least 300 parties, with each party owning less than 5 of the total paid-up shares. These requirements must be met by a company for a period of 183 days in one tax year. The Company has met all of the required criteria; therefore, for the purpose of calculating income tax expense and liabilities for the financial reporting the year ended December 31, 2016 and 2015, the Company has reduced the applicable tax rate by 5. The Company applied the tax rate of 20 for the six months period ended June 30, 2017 and 2016. The subsidiaries applied the tax rate of 25 for the six months period ended June 30, 2017 and 2016. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of June 30, 2017 and For the Six Months Period Then Ended unaudited Figures in tables are expressed in billions of Rupiah, unless otherwise stated 69

26. TAXATION continued