Frances Ball 6 Jun 2019 09:44am

Uber taxes under global scrutiny

The ride-hailing app has admitted that it is under audit by tax authorities a month after its IPO

Tax authorities in eight countries are currently looking into Uber’s use of transfer pricing, with HMRC among them.

Transfer pricing – the technique for moving goods and services between subsidiaries – has been regularly used by multinationals to reduce their tax bills.

Large tech companies have been under particular scrutiny in Europe for the process, and in 2017 the European Commission fined Amazon €250m (£222m) for using a Luxembourg subsidiary for illegal tax benefits.

In a filing to the Securities Exchange Commission, Uber said that the timing of the resolution or closure of audits was “highly uncertain”, and that the value of its gross unrecognised tax benefits could “significantly change” in the next 12 months.

However, the company also said that it expected the gross amount of unrecognised tax benefits to be reduced within that time frame by at least $141m, which it said “is related to ongoing matters with tax authorities regarding the company’s transfer pricing positions”.

The US Internal Revenue Service is also examining Uber’s accounts for 2013 and 2014, in an audit related to a change in how Uber classified intellectual property.

Shares in Uber are down 8% from $45 (£35.4) at the May IPO.