- Google and Indonesia have partly settled an ongoing tax dispute.
- Finance Minister Sri Mulyani confirmed today that there’s an agreement on the amount of tax Google owes for 2016. However, she did not reveal the amount.
- The internet firm has been under investigation by Indonesia’s tax authority since 2016 for allegedly not paying enough tax on the basis of the digital ads revenue it is generating in the country.
- Google Indonesia has not issued a statement.
Why it matters:
- Indonesia has been more strictly enforcing tax payments since Minister Sri Mulyani took office last year. Other technology giants like Facebook and Twitter with large user bases in Indonesia could be targeted next.
- It may not be all settled yet. While the Minster states there’s agreement on the amount Google owes for 2016, earlier demands by the tax authority dated further back. It aimed for close to US$400 million in unpaid taxes and fines.
- Part of the problem is the complexity of Google’s corporate structure, which makes it difficult to determine where revenues are generated. The firm is facing similar issues elsewhere. It settled for US$185 million in its tax dispute with the UK last year.
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