Since the early 90’s, Google has steadily become one of the largest companies on the Web, and they’re now arguably the most recognizable Internet company out there. For a lot of users, its services like Google Maps, Gmail, the Play Store and of course Android itself. The majority of what Google offers customers is of course free, which often ends up with people wondering how they actually make any money. The answer to that is of course ad revenue, and the company has been making billions upon billions from this ad revenue each and every year. On top of these figures, it would come as no surprise that there’s a sizeable about of tax to be paid, but not for the first time this year, Google is facing allegations of unpaid tax. This time it’s in Indonesia, and now it’s thought that Google could end up having to pay as much as $400 Million in unpaid tax.
According to a fresh report from Reuters, Google’s offices had been investigated in Indonesia and that according to Government Official, Muhammad Hanif, who heads up Indonesia’s special cases branch of the tax office, Google paid just 0.1 percent of tax in 2015 alone. This is where the $400 Million figure comes from, and it’s thought the company’s refusal to be audited back in June of this year is what causes the authorities to escalate things. Hanif said in a statement that while “tax planning is legal, aggressive tax planning – to the extent that the country where the revenue is made does not get anything – is not legal.” The majority of Google Indonesia’s revenue is booked through the umbrella Google Asia Pacific office, based in Singapore, and it’s this office that refused the audit back in June.
Whether or not Google will end up paying the $400 Million tax bill is unclear, but it looks as though the Indonesian authorities are beginning to lose their patience. Given that this is not the first rodeo Google has had with allegations of unpaid tax this year, the outcome from this one will be watched closely by governments all over the world. Major technology firms like Google are not alone in the recent scrutiny regarding taxes, as Apple has come under fire for the way they use Ireland in order to pay less tax, and other companies such as Facebook have also faced scrutiny for their taxes, too.