TEMPO.CO, Jakarta - The Finance Ministry's Directorate General of Tax called on Google Asia Pacific Pte Ltd to settle its tax arrears for the 2016 fiscal year. Earlier, the Tax DG urged Google to settle its 2015 tax debts.
Jakarta Special Tax Office head Muhammad Haniv explained that the move was taken to follow up the tax debt settlement currently handled by the tax office.
"The previous [case handled by the Tax DG] is related to the 2015 tax arrears. We will ask [Google] to pay the tax arrears for 2016," Haniv said in a press release.
Haniv explained that the Tax DG is still waiting for goodwill from Google to submit documents to be verified by the data owned by the tax authority.
"The payment may be made this month if not in April, 2017," Haniv said.
The tax evasion case entangling Google surfaced when the giant tech company refused to be audited by the Indonesian tax authority. The tax authority offers Google to settle its tax debts through a negotiation.
However, the tension increased after Google returned the audit order letter issued by the Tax DG. The Tax DG responded the move by issuing preliminary evidence and investigating Google’s permanent business entity. In the perspective of the Tax DG, a permanent business entity includes a technology, in addition to an office.
However, Haniv claimed that Google has shown its commitment to settling its tax debts. Haniv believes that the giant company with good reputation will pay its taxes.
"However, if they insisted on an argument that they don’t have a permanent business entity, we have a way to force Google [to pay taxes]," Haniv said.
The Tax DG is also finalizing tax audit on social media giant Facebook. However, Haniv said that the case is different from Google’s, since Facebook's income has been deducted with income tax.
"Facebook receives 80 percent, since 20 percent has been deducted. Google is different because they claimed that they don't have a permanent business entity and refused to pay taxes," Haniv explained.
Google is also under the Business Competition Supervisory Commission’s (KPPU) scrutiny for allegedly involved in unfair business competition. The KPPU argued that Google’s refusal to pay income taxes or those related to production factors resulted in lower production costs than other companies.
Google has not provided any comments on the case. Google Indonesia spokesperson Jason Tedjasukmana has not yet responded to the question via a text message or phone call.