Uber says its 2013-14 tax returns being audited in US, Latest Business News - The New Paper

Uber says its 2013-14 tax returns being audited in US

This article is more than 12 months old

The US Internal Revenue Service is auditing Uber Technologies Inc's taxes for 2013 and 2014 and the ride-hailing company expects unrecognised tax benefits to be reduced within the next year by at least US$141 million (S$192 million).

In its full quarterly report on Tuesday, Uber said various state and foreign tax authorities were also looking into its taxes.

It was also currently unable to put a definite timeline or estimate on the overall adjustments that might result.

The US$141 million related only to its transfer pricing positions.

This refers to the common multinational practice of charging for services between wholly-owned businesses in different countries or jurisdictions to reduce the tax it pays.

Earlier this year, the company had said in a regulatory filing that it expected unrecognised tax benefits related to the audit to be reduced within the next year by at least US$127 million.

Industry experts characterise transfer pricing as a relatively risky strategy, which typically is among multinationals' top tax concerns and has been used by authorities in the past to go after Apple and Amazon.

"Although the timing of the resolution and/or closure of the audits is highly uncertain, it is reasonably possible that the balance of gross unrecognised tax benefits could significantly change in the next 12 months," the company said.

The announcement came on a day when at least 11 of the brokerages, whose underwriting arms backed Uber's Wall Street debut last month, weighed in with "buy" recommendations on the company's shares as a statutory embargo lifted.

Citi, however, initiated coverage with a "neutral" rating.

The company's stock has struggled since its market debut on May 10 and is trading below its IPO price of US$45. - REUTERS