Google Indonesia May Have Avoided $400 Million in Taxes

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Summary: Indonesia believes Google has avoided paying full taxes to the country in the amount of over $400 million just for 2015.

Alphabet Inc’s Google is having their taxes for the past five years investigated by Indonesia. The country feels the search giant owes them over $400 million for just 2015 in avoided tax payments, according to a senior tax official.

  

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Head of the tax office’s special cases branch, Muhammad Haniv, explained that their investigators went to Google’s local office on Monday. They believe the PT Google Indonesia has paid less than 0.1 percent of income and value-added taxes owed last year.

Read Google Creates New Holding Company Alphabet.

Google Asia Pacific, headquartered in Singapore, is where most of the revenue is generated in the region. The office declined an audit in June, moving the investigation up in seriousness into a criminal case.

Haniv said, “Google’s argument is that they just did tax planning. Tax planning is legal, but aggressive planning – to the extent that the country where the revenue is made does not get anything – is not legal.” Google claims in their statement that they have paid all applicable taxes and are cooperating with the investigation.

See Yahoo May Attempt to Avoid Large Tax Bill.

The tax office estimates the total tax bill including fine for just 2015 to be upwards of 5.5 trillion rupiah or $418 million. They did not provide an amount of the five-year period being investigated. The office also plans to look into other companies that provide content through the internet in the country.

Do you think the tax code should be simplified so that there are less ways for companies to find a way out of paying a full tax? Tell us in the comments below.

To learn more about another company in deep water over their tax bill, read Ireland Must Recover $14.6 Billion from Apple.

Photo: seroundtable.com