Google faces sizeable back tax bill from Indonesia, report says

Indonesia could slap Google with a $400m tax bill for last year alone, amid an investigation into possible illegal tax avoidance that has been stepped up in the wake of the European Commission's tax battle with Apple.

Indonesia's tax authorities plan to claw back five years of back taxes from the Alphabet Inc company, according to a Reuters report citing a senior tax official.

Taking confidence from Europe's €13bn tax bill for Apple, which has been followed by reports on Friday of a $120bn bill in Japan, Indonesia's tax office has escalated the issue to a criminal investigation after Google Asia Pacific declined to be audited.

Google Indonesia paid less than 0.1% of the total income and value-added taxes it owed last year, according to calculations made by the Indonesian tax office, with most of the revenue generated in the country booked through Google's Asia Pacific headquarters in Singapore.

Google said it continues to cooperate with local authorities and has paid all applicable taxes.

Reuters reported that Muhammad Hanif, head of the tax office's special cases branch, said he planned to pursue back-tax claims from other companies that deliver content through the internet in Indonesia.