Apple, Google Face Tax Problems in Asia

American technology giants, Apple and Alphabet Inc.’s Google, have come under fire by tax authorities in Asia.

In Japan, an Apple iTunes unit paid 12 billion yen ($118 million) in tax after underreporting income, reports Reuters.

Broadcaster NHK reported that the unit had not been paying withholding tax on earnings from fees paid by Japan subscribers to another Apple unit in Ireland to pay for software licensing. The European Union has ordered Apple to pay Ireland 13 billion euros ($14.6 billion) in back taxes after ruling it had received illegal state aid. Apple and Dublin plan to appeal the ruling, arguing the tax treatment was in line with EU law.

Meanwhile, in Indonesia, tax authorities are pursuing Google for avoiding tax payments in the past five years. Reuters reports that the search giant could face a tax bill including fines of more than $400 million for 2015 alone. PT Google Indonesia paid less than 0.1 percent of the total income and value-added taxes it owed last year, according to the tax office.

Most of the revenue generated in the country is booked at Google's Asia Pacific headquarters in Singapore, according to Reuters.

"Google's argument is that they just did tax planning," said Muhammad Haniv, head of the tax office's special cases branch, in an interview with Reuters. "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."


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