Alphabet's Google & Indonesia to Reach Tax Settlement Soon
People familiar to the matter claim that US multinational technology firm Google will reach a tax settlement with the Indonesian government. Authorities in Indonesia have become increasingly uncomfortable with multinational companies that generate profit from an Indonesian online audience but lack a permanent presence in Indonesia in the form of a foreign investment company. This applies to various social media platforms as well as Google that only has a representative office in Indonesia, while transactions and revenue (generated in Indonesia) are booked at Google Inc's Asia Pacific headquarters in Singapore.
An agreement could be reached within a couple of weeks, sources close to the matter informed. Possibly the deal includes the requirement for Google to pay back taxes and fines. Google may also have to agree to to a new calculation of profits made within Indonesia.
In September 2016 Muhammad Hanif, Head of the Tax Office's Special Cases Department, said Google could face claims for five years of back taxes, including a bill of over USD $418 million for full-year 2015 as the company is estimated to have paid less than 0.1 percent of the total income and value-added taxes it owed Indonesia in 2015.
Singapore-based Google Asia Pacific declined to be audited in June 2016 (on grounds it is only doing tax planning), prompting Indonesia's Tax Office to threaten to conduct a more thorough investigation into "Google's tax avoidance" in Indonesia.
Not only Indonesia is encouraging Google to pay tax to the government, also authorities in England, Italy and France are pushing the American giant to pay tax.
Read more:
• Indonesia Wants Google to Set Up Local Company & Pay Tax
• Indonesia Wants Internet-Based Firms to Establish Local Entity or Be Blocked
• E-Commerce Market Indonesia: Online Retail Growing Strongly
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