Indonesia reaches tax deal with Google for 2016

Indonesia's finance minister on Tuesday (13 June) said the country had reached a settlement deal with Google over a tax dispute for 2016.

"We already have an agreement with them based on 2016. But we can't disclose the figure, that is a secret," Sri Mulyani Indrawati told Reuters.

Last September, Indonesian tax authorities alleged PT Google Indonesia paid less than 0.1% of its total income and value added taxes, the internet search giant owed in 2015. The tax office was planning to pursue Google over five years of unpaid taxes.

Muhammad Hanif, head of the tax office's special cases branch, said at the time that Google may have to pay a fine of up to 5.5 trillion rupiah ($414m, £326m) for 2015, if it was found guilty.

During the same month, Indonesian tax authorities raided Google's Jakarta office after the company received a warning from officials for refusing a tax audit.

Last November, it was reported that Google was likely to reach a tax settlement with Indonesia, according to which the company would pay back taxes and fines and agree to a new calculation of profit made in the country.

Most of the revenue generated by Google in Indonesia is reported at the company's Asia Pacific headquarters in Singapore, the tax office said.

In May, Google agreed to pay €306m to Italy to settle a tax dispute. Italy had accused Google of evading €227m in taxes between 2009 and 2013, which could attract hefty fines.