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Google reaches deal with Indonesian government over tax dispute

Staff Writer |
Indonesia and Google have reached a deal in a long-running tax dispute, the country's finance minister said Tuesday.

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Indonesia has been pursuing what officials said was $73 billion in taxes owed by Google for advertising revenue from as far back as 2011, when the company first established its Indonesian operations.

"We've had a discussion with them and there has been an agreement based on the 2016 tax year," Finance Minister Sri Mulyani Indrawati said, but wouldn't reveal the amount.

Indonesia has vowed to examine the tax records of global internet giants such as Google, Facebook and Twitter as it seeks to plug revenue shortfalls.

The Communications & Information Ministry said Google and Facebook were responsible for 80% of Indonesia's total digital advertising revenue, worth about $800 million in 2015, but that their incomes are not properly taxed.

Indonesia is one of the biggest markets for Facebook and Twitter.

In December, the tax office threatened to take Google to court after it rejected a settlement offer by Google on the ground that the amount was too small.

Google at that time said it had paid all applicable taxes and was cooperating fully with the Indonesian government.

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