Uber investigated by IRS, foreign authorities for tax charges

An Uber car in traffic. Photo by Dan Gold on Unsplash

Uber Technologies Inc. is being examined by U.S. tax authorities and said that its potential tax charges in a number of key markets could change.

The recently-listed ride-hailing company said in its S-1 disclosure in April, and repeated in its 10-Q filing Tuesday, that the IRS is examining the tax years for 2013 and 2014. Uber also added that it is under examination by other state and foreign tax authorities, and that its tax benefits are to be cut due to the company’s “transfer pricing positions.”

Uber gained 2.6% at 9:34 a.m. in New York Tuesday as broader stock indexes recovered from the previous day’s sell-off. The stock was down 8.3% from the IPO price of $45 through Monday’s close in New York.

Transfer pricing concerns the transactions of goods and services among corporate subsidiaries, and has sometimes been seen as ways to shift income to low-tax jurisdictions. In 2017 European authorities fined Amazon.com Inc. $294 million for booking profits in a tax free unit located in Luxembourg that was meant to license the technology behind its web shopping platform.

While Uber said it believes it has adequate amounts that have been reserved in the relevant jurisdictions, tax years from 2010 to 2019 could be adjusted in a number of its key markets, including the U.S., U.K., the Netherlands, and India.

A spokeswoman for the company didn’t immediately respond to a request for comment.

Uber announced its first quarterly results as a public company last week, posting first-quarter sales near the high end of its previously disclosed preliminary results. The company also reported a $1.01 billion quarterly loss, among the largest of any public company.

Uber’s first quarter gross unrecognized tax benefits rose by $1.3 billion. In Tuesday’s filings, it said it expects the gross amount of unrecognized tax benefits to be reduced by at least $141 million over the next year.

Uber’s reveal of its IRS investigation arrived the same morning analysts at the ride-sharing company’s banks began research coverage of the San Francisco-based company with buy ratings.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.