Google is about to come into the scanner by Indonesia’s tax department for a potential tax bill of more than $400 million for 2015, according to a latest report from Reuters.
Google could face the bill if it is found to have avoided tax payments, a senior tax official told Reuters. As per Indonesian tax office Google Indonesia paid less than 0.1 percent of the total income and value-added taxes it owed last year.
Most of the revenue generated in the country is booked at Google’s Asia Pacific headquarters in Singapore. Muhammad Hanif, head of the tax office’s special cases branch, said its investigators went to Google’s local office in Indonesia but Google Asia Pacific declined to be audited in June.
“Google’s argument is that they just did tax planning,” Hanif said. “Tax planning is legal, but aggressive tax planning – to the extent that the country where the revenue is made does not get anything – is not legal.”
Hanif estimated Google’s tax bill including fines for 2015 could be as much as 5.5 trillion rupiah ($418 million). He also added that the government had also asked to examine the tax reports of the Indonesian offices of Yahoo, Twitter and Facebook.