The government has reached a tax settlement with United States-based tech giant Google for 2016 for an “undisclosed figure” following a long dispute over allegations that the firm had avoided paying adequate taxes.

“We already have an agreement with them based on the 2016 annual tax return form [SPT], but we can’t disclose the figure,” Finance Minister Sri Mulyani Indrawati said after an event on Tuesday.

The deal ended months of probing by the Finance Ministry’s Directorate General of Taxation into Google’s local operations after the tax authorities calculated that the company owed about Rp 5 trillion (US$376.1 million) in back taxes and penalties.

The government, desperate for new tax sources and a boost in state revenue, began negotiations a few months ago to find middle ground with the tech giant, only to end in deadlock.

Google did not immediately respond to requests for a comment.

The government’s short-lived battle against Google has thus undermined Indonesia’s ability to squeeze more revenue from other tech giants, such as Facebook and Twitter, which have been practicing transfer-pricing mechanisms.

source: thejakartapost