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Google Owes Indonesia $400 Million Worth of Taxes in 2015

Travelers Today       By    Marjorie Callanga

Updated: Sep 21, 2016 05:32 PM EDT

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One of the world's most popular search engines is bound to face almost $400 million bill for allegedly avoiding payments and paying only 0.1% of the taxes they owed in 2015, according to Reuters.

Reuters reported that investigators went to Google's local office in Indonesia on Monday and as what Google released for their statement about the issue last week, they insisted that they have paid all their taxes for the said year and that they have been cooperating with local authorities regarding the issue.

According to Muhammad Hanif,head of the tax office's special cases branch, Google declined to be audited in June which urged them to file a criminal case against Google.

If Google will be proven guilty regarding the tax issue, they will have to pay 5.5 trillion rupiah or $418 Million for 2015 alone which is up to four times of the original amount the company owed.

"Google's argument is that they just did tax planning. Tax planning is legal, but aggressive tax planning-- to the extent that the country where the revenue is made does not get anything-- is not legal." Hanif added. The tax office is also planning to file criminal cases against other companies that deliver online content in Indonesia, as stated by WSJ news.

An accounting professor at Warwick Business School in Britain said that Indonesia's move to pursue Google regarding tax issues show that the international tax rides must be turning as he told Reuters.

Crawford Spence also mentioned that Google settled a probe with Britain's tax authority and paid 130 million pounds ($185 million) in back taxes in January.

On the other hand, Yustinus Prastowo, executive director of the Center for Indonesia Taxation Analysis said it is likely that Google will also soon settle the back taxes before the court makes its decision on the issue since tax-related cases usually takes up to three years to be resolved.

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