Uber, it seems, has another vehicle that’s more valuable than any its drivers are using to deliver customers to their destinations.
According to a report, it’s a complex vehicle for avoiding taxes.
The Center for International Corporate Tax Accountability and Research said the ride-sharing service has involved up to 50 shell companies in the Netherlands to produce a lower tax bill.
The Australian research group found that, although Uber earned almost $6 billion in global revenues in 2019, it claimed a $4.5 billion loss, not including China and the U.S.
“This is the Champions League of tax avoidance,” CICTAR principal analyst Jason Ward told Dutch news magazine De Groene Amsterdammer.
The tax dodge has current implications, with Ward telling Business Insider that Uber’s failure to pay taxes in India is robbing that COVID-19-ravaged country of much-need financial resources to fight the pandemic.
Uber disclosed the Dutch tax haven, doing so via filings in 2019 when it moved its intellectual property from Bermuda to the Netherlands.
The CICTAR report, though, explores the structure of its shell-company network.
“Uber transferred its intellectual property through a $16 billion ‘loan’ from one of its subsidiaries in Singapore that in turn owns one of Uber’s Dutch shell companies, a maneuver that grants the company a $1 billion tax break every year for the next 20 years, the researchers found.
CICTAR also found in India, Uber paid less than a third of the 6% tax the country imposes on multinational companies. In Australia, CICTAR found Uber was underpaying its tax bill by $30.5 million in Australia, according to Groene Amsterdammer.
“Uber has supercharged their tax avoidance approach,” Ward told Insider, adding that it’s using an intellectual property tax break “to prevent future tax bills, turning it into a much more useful, viable tax structure in the Netherlands.”