Google faces US$400m bill as Indonesia starts tax probe

[JAKARTA] Google faces a bill of over US$400 million in Indonesia if authorities find it avoided taxes last year, an official said Monday, as Jakarta began a probe into the US tech giant.

Indonesia last week announced it was launching an investigation into Google, alleging that the company had refused to cooperate with tax officials.

Google has insisted that it has paid all taxes due in Indonesia since opening its Jakarta offices in 2011.

On Monday tax investigators visited Google's office as the probe got under way, with senior official Muhammad Haniv telling AFP the California-based company had not fulfilled its obligations while earning millions of dollars in Southeast Asia's top economy.

If authorities find that Google had not paid all its taxes for 2015, it could be forced to pay what it owes and then a hefty fine, he said. This could add up to a total of some 5.5 trillion rupiah (about S$560 million).

"Foreigners reap trillions of rupiah profit here but refuse to pay tax - that is not fair," said Mr Haniv after visiting Google's office.

"If necessary we will take this to court."

He did not comment on what Google could owe for the years before 2015.

In a statement last week Jason Tedjasukmana, the head of corporate communications for Google Indonesia, said the company had always worked closely with the government and had "complied by paying all taxes which apply in Indonesia".

Mr Haniv said the probe was inspired by similar moves against Google in the European Union, where the tech giant is facing a series of fiscal probes.

Jakarta has also put pressure on other foreign tech behemoths such as Facebook and Yahoo over their tax arrangements inside Indonesia.

Global tech businesses have flooded Indonesia in recent years to capitalise on the exploding number of internet users in a country with an enormous young population increasingly using smartphones.

A third of Indonesia's 255 million have access to the internet. Analysts say that number is likely to increase as connectivity improves across the sprawling archipelago.

AFP