Muhammad Haniv, head of the tax office’s special cases branch and his team raided Google’s local office in Indonesia on Monday. It thinks Google Indonesia paid less than 0.1 percent of the total income and value-added taxes it owed last year.
Google Indonesia said that it continues to cooperate with local authorities and has paid all applicable taxes. However it seems that Indonesia is ramping up tax collection to narrow its budget deficit and fund an ambitious infrastructure program. Other governments around the world are seeking to clamp down on rampant corporate tax avoidance.
Haniv added that the tax office planned to pursue other internet firms for back taxes.
If found guilty, Google may have to pay fines of up to four times the amount it owed, bringing the maximum tax bill to $418 million for 2015, Haniv said. He declined to provide an estimate for the five-year period.
Most of its revenue generated in the country is booked at Google’s Asia Pacific headquarters in Singapore. Google Asia Pacific declined to be audited in June, prompting the tax office to escalate the case into a criminal one, he said.