The taxman is examining Uber’s accounts for possible underpayments.
The Times are reporting that HM Revenue & Customs is auditing the company’s accounts from 2014 to 2018 to examine its use of transfer pricing — an accounting technique for moving goods and services between corporate subsidiaries, which multinationals use to reduce taxation.
HMRC is also examining allegations that Uber owes more than £1 billion in VAT. The company, which is valued at about $70 billion, owns the world’s most popular taxi-hailing app and has interests in restaurant delivery, bike-sharing and self-driving cars.
Transfer pricing by American multinationals, particularly technology companies, is under scrutiny in Europe. In 2017, the European Commission fined Amazon €250 million for using a subsidiary in Luxembourg to confer “illegal tax benefits”.
Uber’s use of transfer pricing is being looked at by several states in America and by tax authorities in Australia, the Netherlands, Brazil, Australia, Mexico, Singapore and India. It is also the subject of an income tax examination by the US Internal Revenue Service for 2013 and 2014.
In a regulatory filing, Uber said it was “highly uncertain” when the audits would be completed and it was “reasonably possible” that its tax burden could “significantly change in the next 12 months”. Uber estimated that its unrecognised tax benefits would be reduced in the next 12 months “by at least $141 million”.
However, it said: “Given the number of years remaining subject to examination and the number of matters being examined, the company is unable to estimate the full range of possible adjustments.” It believed that it had “adequate amounts” of tax reserves in the countries where accounts were audited.
