Indonesia plans to pursue Alphabet Inc's Google for five years of back taxes, and the search giant could face a bill of more than $US400 million ($NZ547 million) for 2015 alone if it is found to have avoided tax payments, a senior tax official told Reuters.
Muhammad Haniv, head of the tax office's special cases branch, said its investigators went to Google's local office in Indonesia.
The tax office believes that PT Google Indonesia paid less than 0.1% of the total income and value-added taxes it owed last year.
Most of the revenue generated in the country is booked at Google's Asia Pacific headquarters in Singapore. Google Asia Pacific declined to be audited in June, prompting the tax office to escalate the case into a criminal one, Haniv said.
"Google's argument is that they just did tax planning," Haniv said. "Tax planning is legal, but aggressive tax planning - to the extent that the country where the revenue is made does not get anything - is not legal."
Asked to respond to Haniv's comments, Google Indonesia reiterated a statement made last week that said it continues to cooperate with local authorities and has paid all applicable taxes.
Haniv estimated Google's tax bill including fines for 2015 could be as much as 5.5 trillion rupiah ($US418 million). He declined to provide an estimate for the five-year period.
The tax office is also planning to chase back taxes from other companies that deliver content through the internet in Indonesia, Haniv said.
Total advertising revenue for the industry is estimated at $US830 million a year, with Google and Facebook Inc accounting for around 70% of that, he said.
