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Google Indonesia to Pay US$400M Tax Bill?

The Indonesian government continues to investigate Google’s case in a bid to ramp up tax collection.

On Monday, September 19, Indonesia’s tax officials finally paid a visit to Google’s office in Jakarta in an ongoing investigation that seeks to find out if the tech giant violated its obligation to undergo a state audit.

Head of the Jakarta Special Tax Office Muhammad Haniv revealed that if found guilty, Google could face criminal charges on audit refusal, in addition to over US$400 million in fines for 2015 alone.

Most of the company’s revenue generated in Indonesia is reportedly booked at Google Asia Pacific headquarters in Singapore. But in June, Google Asia Pacific refused to be audited, which further motivated Indonesia’s tax office to turn the case into a criminal one.

See: What Does Tax Amnesty Mean For Expats In Indonesia?

According to Haniv, Google claimed to have carried out tax planning as an excuse for its refusal. While tax planning is acceptable, Haniv emphasized that aggressive tax planning at the expense of the country’s lost revenue is indeed illegal.

In a statement to The Jakarta Post, Haniv warned Google to immediately fulfill its responsibilities. “If Google generates income from Indonesia, it has to pay taxes. It is immoral if Google refuses to do so,” he said.

Responding to allegations, Google publicly claimed to have not made a single violation of the local tax law. Regardless, the company will remain cooperative until the case is resolved.

Indonesia recently revealed its plan to narrow the budget deficit in order to fund its infrastructure programmes. Tax officials are said to be pursuing other big internet companies for back taxes also.

 

Editing by Leighton Cosseboom; featured image by Carlos Luna; video via wochit Business

 

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Caranissa is an editor at Indonesia Expat. She occassionally writes, dances and performs on stage.