Group Overview Operation and Financial Review Financials Other Information Sustainability and Governance 99 Annual Report 2025 Notes to the financial statements For the financial year ended 31 December 2025 11. Income tax expenses (cont’d) Relationship between tax expense and accounting profit A reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate for the years ended 31 December are as follows: Group 2025 2024 Rp million Rp million Profit before tax as per consolidated statement of comprehensive income 3,459,906 2,938,224 Tax at the Singapore tax rate of 17% (2024: 17%) 588,184 499,498 Effect of tax rates in foreign jurisdictions 160,429 117,068 Income already subjected to final tax (70,396) (59,648) Non-deductible expenses 164,007 158,218 Adjustments in respect of previous years 103,828 113,071 Income tax expense recognised in the consolidated statement of comprehensive income 946,052 828,207 The corporate income tax rates in Indonesia are as follows: (a) 22%, effective from fiscal year 2022; and (b) Resident publicly listed companies in Indonesia whose at least 40% or more of the total paid-up shares or other equity instruments are listed for trading in the Indonesia stock exchange and meet certain requirements in accordance with the government regulations, are entitled for 3% reduction of the rate stated in point (a) above. For the financial years ended 31 December 2025 and 2024, the corporate tax rates for companies in Singapore and Indonesia were 17% and 22% (2024: 17% and 22%) respectively. A subsidiary in Indonesia applies 19% (2024: 19%) tax rate instead of the normal tax rate of 22% (2024: 22%) in computing its income tax expense for the reporting period due to its fulfilment to qualify for a reduced corporate income tax rate. Adjustments in respect of previous years largely related to unrecoverable tax losses as a result of expired tax losses for which deferred tax assets have been recognised and changes in assumptions used in the estimation of future taxable profits. The Group is within the scope of the Pillar Two model rules, and it applies the SFRS(I) 1-12 exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. In December 2024, Singapore enacted the Pillar Two legislation and implemented the Income Inclusion Rule (“IIR”) and a Domestic Minimum Top-up Tax (“DTT”), effective from 1 January 2025. Under the legislation, the Group is liable to pay a top-up tax for the difference between its Global AntiBase Erosion Rules (“GloBE”) effective tax rate in each jurisdiction and the 15% minimum rate. The Group has estimated that the effective tax rates exceed 15% in all jurisdictions (Singapore and Indonesia) in which it operates and does not expect any material impact to the consolidated financial statements based on the Group’s assessment using current available information.
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