Google Finally Agreed to Pay Taxes in Indonesia
United States internet product multinational company Google LLC.

JAKARTA (TheInsiderStories) – The United States (US) internet product company, Google LLC was finally willing to pay taxes in Indonesia, followed the 3 years of negotiations, said a senior minister on Thursday (03/28).

Minister of Communication and Informatics Rudiantara said, in principle, Google was willing to pay taxes in Indonesia. Technically, Indonesian businessmen who place advertisements on Google will pay fees to Google in rupiah through a bank account in Indonesia and the tax will be paid by Google companies in Indonesia.

“But technically, whether the Google company in Indonesia is in the form of a permanent business entity or not, it should ask Google Indonesia. The point is after placing advertisements, pay in rupiah, Google will pay taxes according to Indonesia tax regulations,” he said.

Rudiantara continued, the thing that made Google finally want to comply with tax regulations in Indonesia was because there was a mutual agreement agreed between the government and Google. He revealed, the government is open to investment from the international as long as it can provide added value to Indonesia. In this case, the government requires these technology companies to allocate funds for human resources.

This mutual agreement approach was carried out by Rudiantara because the government could not negotiate by forcing regulations to develop and cross border technology companies. “It must be a business approach,” he said.

This approach was also used by Rudiantara to make Spotify adjust to the regulations in Indonesia. He said, Spotify finally agreed to pay taxes in Indonesia through cooperation with local telecommunications companies.

Previously, Google did not pay taxes in Indonesia so that every Indonesian businessmen who placed advertisements on Google paid fees through Paypal and did not pay taxes in Indonesia. But that doesn’t mean Google doesn’t pay taxes, Google still pays taxes, but uses international tax rules to find the cheapest tax rates.

Finance Minister Sri Mulyani Indrawati acknowledged that the tax issue relating to various types of electronic transactions is indeed a problem faced by all countries. However, she stressed that the Directorate General of Taxation uses various laws and regulations that exist in Indonesia to state that activities or activities that use online or use e-commerce platforms are subject to taxation in Indonesia.

Taxpayers could have different arguments, but Mulyani could negotiate it whether bilaterally or through a tax justice mechanism. According to her, existing activities in Indonesia are expected to form a so-called permanent business entity, and that will cause that their economic activities are objects of taxation in Indonesia, including Google Asia Pacific.

The minister acknowledged that many countries also have difficulties resolving tax issues with Google. But she stressed that her party would keep trying to make economic activities residing in the Republic of Indonesia and owned by Indonesian Taxpayers to pay taxes in accordance with the existing laws in the country.

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