Google to Be Investigated by Indonesia for Possible Unpaid Taxes

Advertisement
By Reuters | Updated: 15 September 2016 17:47 IST

Indonesia's tax office will investigate Alphabet Inc's Google for suspected unpaid taxes in Southeast Asia's largest economy, a senior finance ministry official said on Thursday.

Muhammad Hanif, head of the specials cases branch in the tax office, said Google's refusal to cooperate after it was sent a letter in April requesting to be allowed to examine the company's tax reports had raised suspicions.

Advertisement

"We will elevate this to an investigation because they refused to be examined, and this is definitely an indication of criminal activity," Hanif told a news conference.

He added that the probe would not be launched until the end of the month at the earliest.

Advertisement

Taj Meadows, head of policy communication for Google in Asia Pacific, declined to comment immediately on the issue, but said in an emailed response that the company would revert as "soon as it can".

The government had also asked to examine the tax reports of the Indonesian offices of three other US Internet based companies - Yahoo, Twitter and Facebook.

Advertisement

Those three companies have complied, officials said.

Yahoo and Google have formed Indonesian limited liability companies, while Twitter and Facebook operate branches of their Asia-Pacific offices in Indonesia.

Advertisement

The government believes these companies owe income and value added tax on billions of dollars of revenue they generate from advertising in Indonesia, the tax office said.

Hanif said Google's Indonesian entity was only allocated around 4 percent of the total revenues generated from the country, and it was this amount that was taxed, which he described as too small and "unfair".

The communications ministry had estimated the value of digital advertising in Indonesia at about $800 million (roughly Rs. 5,361 crores) last year. The ministry said all of it was untaxed.

There was no immediate explanation for the wide discrepancy of the two agencies' estimates for digital advertising revenue.

Indonesia is facing a sizeable revenue shortfall this year as the resource-rich country can no longer rely on commodity-related income.

In a separate development, the tax office said it is checking whether Ford Motor Co had avoided paying appropriate taxes, after a local newspaper reported that the US car maker modified imported Everest model vehicles sold in Indonesia to pay a lower tax rate.

If the car maker is proven to have caused state losses, it may have to pay back taxes of up to four times the amount it owed, according to Indonesian law.

"We have always strictly complied with all Indonesia government regulations and policy, including all import-related tax and customs requirements, related to each of our Ford vehicles officially marketed and sold in the country," he said.

Ford announced in January it is closing all operations in Southeast Asia's biggest economy, where it held a 1 percent market share.

© Thomson Reuters 2016

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Google, Indonesia, Yahoo, Facebook, Twitter, Ford
Advertisement

Related Stories

Popular Mobile Brands
  1. OnePlus Nord CE 6, Nord CE 6 Lite Will Launch in India on This Date
  2. Xiaomi 18 Pro Max Tipped to Sport a Large Display and This Snapdragon Chip
  3. Poco C81, C81x to Launch in India With Up to 6,300mAh Battery on This Date
  4. OnePlus Ace 6 Ultra, New Gaming Controller Will Launch on This Date
  5. Huawei Pura 90 Series Key Specifications Surface Ahead of China Launch
  6. Dell 15 Refreshed With Up to Intel Core Ultra 7, 15.6-Inch Display
  7. AI-Driven Global Memory Shortage Might Not End Until 2030
  8. Oppo Find X9s Spotted on Geekbench With This MediaTek Dimensity SoC
  1. Nee Forever OTT Release Date: When and Where to Watch This Tamil Romantic Drama Online?
  2. Nukkad Naatak OTT Release Date: When and Where to Watch This Social Drama Online?
  3. Huawei Pura X Max Launched as Company’s First Wide Foldable With 5,300mAh Battery: Price, Features
  4. Poco C81, Poco C81x India Launch Date Revealed Along With Design and Key Specifications
  5. OpenAI’s Sora Chief, CTO Announce Departure Amid Company’s Growing Enterprise Focus
  6. Apple's Redesigned MacBook Pro Said to Be Delayed Due to Supply Shortages
  7. Toshiba Z670SP MiniLED TV Series Launched in India With Up to 100-Inch 144Hz Screens: Price, Specifications
  8. Resident Evil Requiem Could Get Mercenaries Arcade Mode in May, Leak Suggests
  9. Global Memory Shortage Could Persist Until 2030 as Suppliers Prioritise AI Data Centres: Report
  10. Dell 15 (2026) Launched in India With Up to Intel Core Ultra 7 and 15.6-Inch Display: Price, Features
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2026. All rights reserved.