Exclusive: Google may face over $400 million Indonesia tax bill for 2015 - government official

Mon Sep 19, 2016 10:51pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Gayatri Suroyo and Eveline Danubrata

JAKARTA (Reuters) - Indonesia plans to pursue Alphabet Inc's (GOOGL.O: Quote) Google for five years of back taxes, and the search giant could face a bill of more than $400 million for 2015 alone if it is found to have avoided payments, a senior tax official said.

Muhammad Haniv, head of the tax office's special cases branch, told Reuters its investigators went to Google's local office in Indonesia on Monday.

The tax office alleges PT Google Indonesia paid less than 0.1 percent of the total income and value-added taxes it owed last year.

Asked to respond to Haniv's comments, Google Indonesia reiterated a statement made last week in which it said it continues to cooperate with local authorities and has paid all applicable taxes.

The move comes at a time when Indonesia is eager to ramp up tax collection to narrow its budget deficit and fund an ambitious infrastructure program. Other governments around the world are also seeking to clamp down on what they see as egregious corporate tax avoidance.

Haniv added that the tax office planned to pursue other internet firms for back taxes.

If found guilty, Google may have to pay fines of up to four times the amount it owed, bringing the maximum tax bill to 5.5 trillion rupiah ($418 million) for 2015, Haniv said. He declined to provide an estimate for the five-year period.

Most of its revenue generated in the country is booked at Google's Asia Pacific headquarters in Singapore. Google Asia Pacific declined to be audited in June, prompting the tax office to escalate the case into a criminal one, he said.   Continued...

A woman holds her smart phone, which displays the Google home page, in this picture illustration taken February 24, 2016.  REUTERS/Eric Gaillard/Illustration/File Photo