Google pays back taxes owed to Indonesia since 2015

An Indian visitor outside the Google stall at the India Mobile Congress in New Delhi on Sept 27, 2017.
An Indian visitor outside the Google stall at the India Mobile Congress in New Delhi on Sept 27, 2017.PHOTO: AFP

JAKARTA - Google has paid back taxes owed since 2015 to the government of Indonesia, making it the fourth country that has managed to get the technology giant to pay tax.

The undisclosed sum was paid in full on Thursday (Nov 29), reported the Jakarta Globe, marking a new milestone in the country's efforts to rein in tech companies.

"A company with the initial 'G' has paid its taxes in accordance with the provisions of Indonesia tax legislation," Tax Director General Ken Dwijugiasteadi said on Thursday, as quoted by Antaranews.com

Mr Ken, who served his last day as tax chief on Thursday, declined to disclose the amount Google paid, saying it was confidential.

Indonesia is the fourth country after Britain, India and Australia that has managed to get the tech giant to pay tax.

The tax dispute centred on Google Indonesia, the company's local entity, which said it did not need to pay tax in Indonesia because its advertising revenue was booked under its Singapore-based arm Google Asia Pacific.

However, the tax office argued that under Indonesian income tax law, Google Indonesia was classified as a permanent establishment of the Singaporean company, therefore all its revenue must be taxed in Indonesia.

Mr Ken said Google will continue to pay income tax and value added tax in Indonesia, reported the Jakarta Globe.

Other social media services, such as Facebook and Twitter, are expected to follow suit.

"Many other companies have agreed to pay tax here. They are in the finalisation stage," Mr Ken said.