Earlier today, Indonesian tax office's head of special cases Muhammad Hanif held a press conference during which he announced that the country will conduct a thorough investigation of the Alphabet Inc-owned Google regarding potentially unpaid taxes on the company's advertising revenue. Hanif explained that the decision to open an investigation against Google wasn't made lightly and that his office made an official request to examine the firm's tax reports back in April after certain suspicions were raised. However, Google refused to cooperate which is why the Indonesian official stated that the tech giant left his office no other choice.
On the other hand, representatives of PT Google Indonesia stated that the company was fully complying with all of the government's requests, adding that the firm is paying "all applicable taxes" and is constantly and completely cooperating with the local authorities. Whether the truth is somewhere in between or one of the parties is not telling the whole truth on the matter remains to be seen but what's curious is that the Google's Indonesian branch is the only US-owned Internet company in the country that's targeted by the tax officials. Namely, in addition to PT Google Indonesia, the government has also recently requested tax reports from the local branches of Facebook, Twitter, and Yahoo. However, officials stated that all three of these have been fully cooperative and that Google is the only one that's allegedly causing trouble.
The recent Indonesian tax office's inquiries into US-owned Internet companies have all been related to potentially unpaid income and value added taxes on revenue made from advertising in the country. Hanif specifically stated that he suspects only 4% of the advertising revenue Google makes in Indonesia is actually allocated to the company's Indonesian branch. He described this amount as "unfair", explaining that the company only pays taxes on revenue allocated to it. Political scientists are speculating that this sudden attempt to generate more taxes in Indonesia is closely related to the drop in revenue the country experienced this year for various reasons.
Another thing worth noting is that it's possible this news conference during which Hanif announced an official investigation against Google is his last attempt to publicly intimidate Google into giving over the requested tax reports. Namely, the Indonesian tax official stated that the investigation won't be officially opened until at least the end of the month and there's no other apparent reason for the delay. Whatever turns out to be the case, this isn't Google's first rodeo with the tax officials. Earlier this summer, the company's Spanish offices were raided by the government over tax evasion allegations.