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Google to Pay Tax in Indonesia

Negotiations have been going on for a few months now, but Google have decided to give in and pay tax to the Indonesian government.

As I’ve talked about before on this site, here in the UK big companies such as Google pay virtually no income tax, which has led many financial experts to wonder exactly what is going on. Have they just got really good accountants? They probably have, but many people believe they should be paying more tax.

That is what the Indonesian government thought as well, which in turn led to them holding talks with the search engine company about why they were paying almost no tax, despite making millions in the country of Indonesia

What’s really interesting here is that now Indonesia have been successful in getting Google to pay more tax, this might just inspire other countries to follow suit…perhaps even the UK? It might just happen, although it wouldn’t surprise me if nothing happens. You just really don’t know.

Of course, the UK government did manage to get a bit of money out of Google…£120 million, and it is thought this was for back taxes for the last ten years. So that’s about £12 million a year in tax for a company that regularly has revenues over £1 billion pounds.

Google currently hires thousands of contractors and freelancers in the UK who have to hire accountants, fill in their tax returns, and ultimately, pay HMRC what they owe them.

It seems very strange that all these people who are hired by Google, most probably, pay more tax combined than Google do.

Understand that I’m not accusing Google of anything. Far from it. I just think that more needs to be done to look into why they are paying so little tax in the UK. Maybe they have amazing accountants? Yes that is possible. Or perhaps they have a lot of costs? Again, this is possible.

Who knows exactly what the reason is? We just need to find out.

Back to Indonesia and one of their tax officials commented to the media that 5 years of back taxes is what the government wanted, with an estimated $400 million of taxes last year alone.

It’s certainly quite a bit of money we are talking about here, but let’s wait to find out what the real number is, as sometimes these reports are not entirely accurate.

When asked for a comment about the matter Google refused to answer to the press.

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