TAXATION continued FS English YE 2016 Audited PT Telekomunikasi Indonesia Tbk

PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 72

26. TAXATION continued

e. Tax assessment continued i The Company continued The Company received a letter from the Tax Authorities dated August 23, 2016 regarding Field Tax Audit Notification for tax period January to December 2015. As of the date of approval and authorization for the issuance of these consolidated financial statements, the audit process is still ongoing. ii Telkomsel In December 2013, the Tax Court accepted Telkomsel ’s appeal on the 2006 VAT and withholding taxes totaling Rp116 billion. In February 2014, Telkomsel received the refund. On July 3, 2015, in response to Telkomsel ’s letter claiming for interest income related to favorable 2006 VAT and withholding tax verdicts, the Tax Authorities informed Telkomsel that the claim cannot be granted since the Tax Authorities filed a request for judicial review to the Supreme Court “SC”. On August 19, 2016, Telkomsel received a notification from Tax Court that the Tax Authorities filed a request for judicial review to SC for the VAT case amounting to Rp108 billion. The contra memorandum for judicial review was sent on September 14, 2016. On April 21, 2010, the Tax Authorities filed a judicial review request to the Indonesian SC for the Tax Court’s acceptance of Telkomsel’s request to cancel the Tax Collection Letter “STP” for the underpayment of December 2008 income tax article 25 amounting to Rp429 billion including a penalty of Rp8.4 billion. In May 2010, Telkomsel filed a contra-appeal to the SC. In July 2016, the case has been announced on SC Website in favor of the Tax Authorities. Although Telkomsel has not received the official verdict from the Court, conservatively the tax penalty of Rp8.4 billion has been recognized. The tax base of Rp421 billion shall not become an additional tax expense as the nature of corporate income tax amount is creditable for Telkomsel. In May and June 2012, Telkomsel received the refund of penalty on 2010 income tax article 25 underpayment amounting to Rp15.7 billion based on the Tax Court’s verdict. On July 17, 2012, the Tax Authorities filed a judicial review request to the SC on the Tax Court’s Verdict. On September 14, 2012, Telkomsel filed a contra-appeal to the SC. In July 2016, conservatively, Telkomsel recognized the tax penalty of Rp15.7 billion as it has similar legal substance with 2008 penalty of income tax case. On May 24, 2012, Telkomsel filed an objection to the Tax Authorities for the 2010 underpayment of value added tax of Rp290.6 billion including penalty of Rp67 billion and recorded it as a claim for tax refund. On May 1, 2013, the Tax Authorities rejected Telkomsel’s objection. Subsequently, on July 29, 2013, Telkomsel filed an appeal to the Tax Court. On March 16, 2015, the Tax Court accepted Telkomsel’s appeal and May 13, 2015, Telkomsel received a refund for value added tax and amounting to Rp290.6 billion. On June 24, 2015, The Tax Authorities filed a judicial review to the SC and on May 2, 2016, Telkomsel received a notification from Tax Court regarding the judicial review. Subsequently, on May 27, 2016 Telkomsel filed a contra-appeal to the SC. As of the date of approval and authorization for issuance of these financial statements, the judicial review is still in process. PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2016 and for the Year Then Ended Figures in tables are expressed in billions of Rupiah, unless otherwise stated 73

26. TAXATION continued