Indonesia probes Google over millions in unpaid taxes

TomoNews US 2016-09-20

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JAKARTA, INDONESIA — Indonesia is investigating Google over five years of unpaid taxes on advertising revenue that could lead to a bill of $400 million for last year alone.

Indonesia thinks Google only paid 0.1 percent tax on its Indonesian ad revenue last year by diverting the cash to its Singapore office, Reuters reported.

Australia has also raised questions in recent years about Google’s practice of booking Aussie ad revenues through Singapore, according to the Financial Times.

Australia’s corporate tax rate is 30 percent. That figure drops to 25 percent in Indonesia and just 17 percent in Singapore.

Web giants Yahoo, Twitter and Facebook are also being investigated by Indonesia, which has launched a separate probe into taxes paid by the Ford Motor Company.

Indonesia claims Google allocated just 4 percent of the total revenue it generated in the country last year to its Indonesian branch.

The Indonesian communications ministry estimates that the digital advertising industry in the country was worth $800 million last year, and none of it was taxed.

Economic growth is slowing in Indonesia and the resource-rich country faces a revenue shortfall this year because of low commodity prices.

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