Google Inc’s Jakarta office was recently raided by Indonesian tax officials in an effort to collect unpaid outstanding tax liabilities by the company.
In a statement to Jakarta Post, Muhammad Haniv, head, Jakarta Special Tax Office said that tax investigators had visited Google’s office as part of an investigation to look in to the company’s refusal to undergo a state tax audit. The company could face criminal charges, if found guilty to tax evasion.
In his statement to the newspaper, Haniv also highlighted tax investigators’ attempts to find out if Google has a permanent establishment (PE) in Indonesia. This would help them incur the tax revenues generated by the company over the last five years. Although he did not specify the exact amount owed by Google as unpaid taxes, he confirmed that the company could face fines of up to Rp 5.5 trillion (US$418 million) for 2015.
He also said that if the company chooses to continue its operations in the country, it has to pay its taxes, and if it refuses, it will be deemed “immoral.”
A Google representative told Marketing said, “Indonesia has been incorporated as a local company in Indonesia since 2011. We have been and will continue to cooperate with the government and have paid all applicable taxes in Indonesia.”
This move comes at time when Indonesia is fierce on earning back its revenue from internet companies. With the global economic slowdown, this is expected bridge the gap in state budget by the end of the year.