How Uber Australia is filling a Dutch cash pool and why it is battling an $ 81.5 million payroll tax bill
Uber Australia continued its long-standing practice of sending income to its parent company in the Netherlands.
- Uber financial accounts show Uber Australia Holdings directors for the year 2020 were its own tax advisers
- The company sends much of its locally earned income to its Dutch parent company, which it describes in its accounts as a Dutch “cash pooling arrangement”.
- Experts say the company uses this model to minimize taxes, but the company says it pays all the taxes it owes in every jurisdiction it operates in.
The rideshare and food delivery platform’s latest financial accounts also reveal that the Australian company has asked the NSW government if it should hand over drivers’ payroll taxes and has been hit with a bill tax of $ 81.5 million, which it disputes.
In 2015, Uber told a Senate investigation into corporate tax evasion that about 25% of every transaction in Australia goes to its parent company in the Netherlands.
This entity – Uber’s wholly owned subsidiary based in the Netherlands called Uber International Holding BV – then paid Uber Australia a fee for providing support services in Australia.
Uber Australia’s 2020 accounts indicate that: “The Group has a cash centralization agreement with Uber BV and all funds in the bank are transferred to Uber BV at the end of each day.”
There was an interest charge to have this money in the Dutch cash pool of $ 5.5 million in 2020 and $ 9.5 million the year before.
Uber Australia reported over $ 1 billion in revenue and nearly $ 7 million in after-tax profit for the year 2020. This is compared to $ 906 million in revenue and $ 1.6 million in after-tax profit. taxes in 2019.
Its accounts also show “service fees paid to related companies” of $ 643 million, more than half of its total reported income.
It is not known to which company (ies) these service fees were paid, whether Uber BV or another offshore related entity.
In the same section of its accounts, Uber Australia notes a “collection on behalf of a related company” of nearly $ 6 billion, more than offset by a “payment on behalf of related companies” of nearly 5.3 billions of dollars.
Her accounts show she paid $ 17.3 million in corporate income tax, up from $ 11.1 million the year before.
Uber has long maintained that it pays all the taxes it owes in Australia.
A spokesperson for Uber did not respond to ABC News questions about its financial accounts and the company’s offshore structures, but said she was delighted that after eight years in Australia, Uber’s brands and Uber Eats “continue to show strong growth.”
$ 81.5 million in payroll taxes in New South Wales
Uber’s accounts also reveal further details of a payroll tax dispute with the NSW government.
They reveal that on September 12, 2018, Revenue New South Wales issued a payroll tax audit against the company and that in February of this year, tax bills were issued against the group for a total amount of $ 81.5 million.
These are the amounts that the State considers that Uber owes until June 30, 2020 and the accounts indicate that “the Group has filed an objection to each of the assessments”.
The company claims that if its attractiveness “is not favorable, it would reduce the Group’s operating income”.
“The Group expects to obtain a response, and therefore certainty on the situation of social charges, before the next closing date”, specify its accounts.
“At the date of the consolidated financial statements, management continues to believe that it will succeed on appeal and that it would therefore not be liable for the amounts of social contributions in dispute.
But TWU national secretary Michael Kaine argued that “New South Wales taxpayers have joined carpool drivers and delivery men as latest Uber group ready to scam.”
Mr Kaine called on the NSW government to “listen to its own government department that says they are workers with rights, and finally call on the Silicon Valley giant to come to terms.”
He said if the NSW government ‘cracks’ then ‘Uber will poke fun at the bank for taxpayers and workers’ fees.
Uber also notes in its accounts the recent class action lawsuit by Australian law firm Maurice Blackburn on behalf of thousands of taxi and rental car drivers against Uber.
The law firm alleges that the company’s operations in Australia were illegal because the company knew its drivers were not properly licensed and did not have the proper accreditation.
“The Group denies these allegations and intends to defend itself vigorously against the lawsuit”, indicate the accounts, noting that “the procedure being still at an early stage, it is difficult to measure the potential financial result”.
Uber faces similar legal challenges in many foreign jurisdictions, as it has long argued that it is a technology company, not a transportation company.
All of Uber’s Australian directors in 2020 were its own tax advisers
Uber’s accounts also show that Uber Australia Holdings’ directors for the year 2020 were in fact its own tax advisers.
François Chadwick (who resigned from Uber Australia in May 2021) was the global head of tax and accounting at Uber in the United States. He resigned from this post in April of this year.
Based in Australia, Nicholas Falzon is a partner of the accounting firm PKF. His bio on the company website states that “Nicolas’ background includes extensive experience advising high net worth individuals with respect to their compensation, tax strategies, investment structuring, estate planning and estate planning. retirement “.
He adds that “Nicholas has worked with a number of foreign companies establishing subsidiaries in Australia and has advised on all financial aspects of establishing the business.”
Keir Gumbs is listed as another Australian director in 2020. He joined Uber Technologies in 2019 and was Uber’s deputy general counsel in the United States. He left Uber in July.
Dutch shell company “leaves little taxable profit behind”
Several submissions to the Special Senate Committee on Job Security argued that Dutch shell companies are at the heart of Uber’s global operations.
A submission from the Center for International Corporate Tax Accountability and Research (CICTAR) found that in 2019 Uber’s main Dutch front company, controlling more than 50 other Dutch subsidiaries, raised more than $ 5.8 billion (7 , $ 8 billion) in operation. revenues from countries around the world except the United States and China.
“The direct transfer of income from around the world to the Netherlands leaves little or no taxable profits,” the communication said.
“The $ 8 billion Dutch tax shelter was created in 2019 when Uber transferred its intellectual property rights from Bermuda to the Netherlands.”
He said the sale was funded by a $ 16 billion loan from an Uber subsidiary in Singapore.
“The Singapore subsidiary is the immediate parent company of the Dutch shell company which controls Uber’s global empire,” the statement said.
“The accrued interest on this loan will further reduce taxable income in the Netherlands by $ 1 billion per year for the next 20 years.”
He also added that “the revenue generated by Uber’s global ridesharing and meal delivery services, excluding the US and China, accumulates in Dutch subsidiaries with limited financial reports.” .
The submission called for national and global rules to be changed, so that more tax revenue can be collected from Uber and other multinationals.