TEMPO.CO, Jakarta - The Directorate General of Tax, the Finance Ministry, continues to collect evidence to name Google as a permanent establishment (Badan Usaha Tetap/BUT) as it plans to collect its tax. Jakarta Special Tax Office head Muhammad Haniv said that income tax investigators had been pursuing the data of US-based Google Inc.
According to Haniv, Google Inc. was the company that registered the google.id domain listed in the Indonesian Internet Domain Name Management (PANDI). Google Inc. named Menara BCA Grand Indonesia as the operational office of google.id, while the address for tax collection is in the United States. PANDI documents show that Google Inc. registered google.id domain on December 18, 2014, under admin organization named PT Google Indonesia. “It’s clear, it has a BUT,” Haniv said yesterday.
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Haniv said that Google Inc. named Google Indonesia as a BUT that shall pay taxes over its business transactions in Indonesia. The company, however, had adopted aggressive tax planning instead. “It’s not equal to what should be [paid]. It’s illegal,” he said. Google told the tax office that it did not have a BUT and was not an Indonesian taxpayer. Haniv, however, insisted that Google had met the BUT criteria because it was listed and runs its business in Indonesia. “[We have] plenty of evidence,” he said.
Aside from representative offices, branches, plants and workshops, content delivery network (CDN) server installation on base transceiver station (BTS) could also be used as an evidence of BUT, Haniv said. He reasoned that Google for has been using the BTS for Google’s advertising program AdSense. The CDN technology is also used by cellular operators to help speed up access to certain websites, including Google-owned YouTube.
Google Indonesia representatives yesterday complied with the Tax DG demand to verify its electronic transaction data. They declined to comment after the meeting.
Yustinus Prastowo, Director Executive of Center for Indonesia Taxation Analysis, said that the Tax DG may investigate Google’s activity in the United States through information exchange. The Communication and Informatics Minister Rudiantara said he would await the resolution to the tax row before introducing a regulation on digital company transaction that would allow tax collection.
PUTRI ADITYOWATI
