The Indonesian government announced an investigation into Google over possible unpaid taxes. In a press briefing, the head of the Taxation Directorate General’s Jakarta branch Muhammad Hanif said Google had rejected a request, sent in April, for permission to examine its tax reports, the Jakarta Post reports. The investigation will continue "because its refusal indicates [that] a criminal act [occurred]," Hanif said.
Google only allocated 4 percent of its revenues to be taxed, a figure that the tax office claims is unfair, considering that the company receives much more from advertising income in Indonesia. According to the tax authority, Google does not consider that it has a permanent establishment in Indonesia. This is a requirement of the government, imposed on global tech giants offering services in the country. However, the requirement does not yet have a legal basis because the Communications and Information Ministry is still drafting the regulation.
