Uber examined by IRS for tax charges
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 percent 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 percent 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.