The tax authority in Indonesian capital Jakarta threatened Google with legal action for failing to hand over transaction data for an investigation into a case alleging the internet giant avoided paying millions of dollars in taxes.
Muhammad Haniv, head of the Jakarta Directorate General of Taxation, told Tempo.co Google needed to hand over the data by late January, noting the firm likely would agree to do so before the government started a legal investigation. “If there is any indication of delaying tactics, we will raise the issue to an investigation level, involving police and prosecutors,” he told the publication.
In September Indonesia’s tax office said it would investigate Google for not paying taxes on billions of dollars of advertising revenue over the past five years. The tax office alleges Google Indonesia paid less than 0.1 per cent of the total income and value-added taxes it owed in 2015.
The government said Google owes IDR337.5 billion ($25.3 million) in back taxes and IDR3 trillion in penalties, since the Directorate General of Taxation estimates Google’s revenue reached IDR6 trillion in 2015, the Jakarta Post reported.
After the data from Google Asia Pacific is turned over the government expects to find detailed ad contract data to support its case.
Late last year the government gave Google the chance to negotiate, but the company said it needed more time. Haniv suspects the delay is caused by Google being worried that all of its activities in Indonesia would be uncovered. He told Tempo.co the world’s approach in dealing with Google resulted in settlements not based on the accurate tax calculations.
Google faces similar tax threats around the world. Shortly after Indonesia’s tax office said it was investigating the company, Thailand’s Finance Ministry announced it was working to tighten its tax rules for internet and technology companies like Google. The Thai government set up a working committee and reportedly is focused on changing existing regulations, unlike Indonesia, which is seeking back taxes from Google.