The car is untouchable in Australia. Wide streets, hardly any cyclists, plenty of parking spaces and excellent roads. The country of continental size is fully equipped for the vehicle. On the virtual map of Sydney, the Uber driver point is approaching the fastest time. This summer evening, the ride point is Bondi Beach, Sydney’s famous city beach. Uber cars in Australia are mostly white, and drivers are mostly the children of immigrants from the western parts of the city, where the average income is much lower than in residential areas of the Pacific Ocean.
As you drive toward the Newtown Student Quarter, sea air flows through the open window. From the road there is a view of the bay where Sydney is hiding. Ferries that are essential to the city’s public transport flow over the water. Briefly featured the famous Harbor Bridge, which was completed in 1932 after a massive government investment, and which was not repaid until 50 years later. In the early 1990s, the city built another tunnel under the harbor for about seven hundred million dollars. Sydney Cricket Stadium lights burn above trees, which is a sacred land for sport-loving Australians. The stadium is public domain.
An Uber driver stands at the start of King St, Newtown’s busy nightlife street, in the shadow of the University of Sydney’s towers, as the city trains its next generation of doctors, artists and lawyers. It is not necessary to pay with the driver: the payment is done automatically by credit card. The driver says goodbye. Thanks to colleague.
A split second later, the A $ 35 that the trip costs were on Uber NL Holdings 1 BV’s account, thirty percent attributable to the Australian driver. According to the study, the Dutch holding company, which in turn includes at least fifty other companies from Uber BV, is the heart of the taxi and meal delivery company’s financial system. ‘Taken for a ride’ dat de Australische ngo Center for International Business Tax Accountability and Research (Sectar) in order to fnv Procedure. Uber’s worldwide sales volume (excluding China and America) in this Dutch bv ended, in 2019, totaling $ 5.8 billion, while at the same time losing $ 4.5 billion on paper. The result: Uber pays little or no tax in all the countries in which it operates.
Jason Wards concludes, “This is avoiding the Champions League taxes.” Sectar. “All of this is legal and at the same time completely immoral.” Because whether it’s the bridges or the expensive tunnel in Sydney, or the traffic lights and traffic police of Calcutta, Uber doesn’t pay a single cent for the infrastructure that taxi drivers and meal providers use to their heart’s content.
“All of this is legal and at the same time completely immoral.”
“ It is surprising that former startups and large international tech firms in particular are creating these kinds of morally reprehensible constructions to pay the least amount of tax possible, ” says Arjan Legor, professor of tax and public finance at Tilburg University. Starbucks is famous for this and Google has also avoided taxes across the Netherlands for a long time. Profit maximization comes first in these firms and the factors of production are mobile. Financial flows are easy to change. Moreover, there seems to be a lack of inner awareness that you are also contributing something to society through taxes.
About parts of Ubers Reports of tax evasion have already appeared in the financial press, and have yet to be officially published SectarHowever, research shows how large and coherent the system is. The Dutch trail started when Uber transferred its intellectual property, say, logo and app from Bermuda to the Netherlands in 2019. This ‘sale’ was funded through an internal loan of US $ 16 billion from Uber in Singapore on a regular quarterly basis. LiborInterest, with an increase of six percent. This loan provides an annual tax deduction of $ 1 billion in the Netherlands for the next 20 years.
National Uber companies around the world also pay relatively hefty sums for administration (58 percent of sales) and intellectual property, so they are almost losing ground on paper. The Australian government lost more than $ 39 million in corporate taxes this way in the past year Sectar Based on public sources. Worldwide, it is estimated that 556 million taxes are avoided in this way. Uber makes a profit at the inclusive company in Singapore – a tax haven.
The cost of it Sectar Great difficulty mapping Uber’s financial system, as the large portions are completely opaque. In the United Kingdom, for example, Uber has managed to classify it as a small and medium-sized business. “As a result, Uber doesn’t have to publish its financial report here,” Ward discovered. In terms of global financial flows, Uber can be compared to an international bank, notes the tax researcher, but the company is not obligated to adhere to applicable banking rules. “There is not enough control anywhere.” The Netherlands also earns nothing from the many Uber BV companies within its borders, Ward knows. “You’re a tax haven for Uber. The only company that sends out high bills is the accounting firm PricewaterhouseCoopers (PwC), which is involved in this financial build-up.
How can this international tax evasion be addressed? What can the Netherlands do? “You are in and of themselves on the right track in Europe,” Ward replies. The European Union wants to oblige international companies to disclose the amount of taxes they pay in each country in which they are located. This is a good start, because you can hope companies like Uber fear damaging their image and pay taxes under public pressure. Meanwhile, the Netherlands should be able to slightly consolidate control of Uber BVs, de Sectar-Collaborator. For example, he found several Uber BVs in the Chamber of Commerce that never submitted an annual report – which is mandatory.
British Uber drivers are now entitled to workers’ rights. This is a start
The Australian says there is also room for improvement in the area of legislation. In some countries, for example, it is forbidden to use only private limited companies for tax evasion, as a financial builder. This can also be done in the Netherlands.
“We have of course introduced withholding tax on intellectual property and interest in the Netherlands this year, but it only applies to about 25 countries. Singapore is not on that list and this is how Uber is outperforming it,” says Arjan Legor. However, according to professor at Tilburg, there is Questions about the company’s additional 6 percent fee on the domestic loan. “I’m very surprised that the Dutch tax authorities agreed to this.” Legor says technology companies are making the most of tax cuts introduced by national governments in the past century. So much so that multinational corporations have been taxed twice that now they pay nothing twice.
International measures He will have to offer the most important solutions for this type of tax evasion, “responds Rainer Ashmann from fnv He. She SectarResearch. Companies like Uber always know how to find short cuts to avoid national tax legislation. As an example, he cites Uber’s sanctions in India, which were described in the report.
In 2016, the Indian government imposed an additional tax on international companies permanently established in the country. Investigation now shows that Uber India Systems Private Limited (uispl), Uber’s largest Indian subsidiary, paid only 320 million Indian rupees (now 3.5 million euros) in this tax in the year 2018-2019. Less than one-third of the six percent legally established. Uber India paid 233 million Indian rupees (2.6 million euros) in taxes, while it has 8.9 billion Indian rupees (98 million euros) in the country. So it’s only 2.6 percent.
Asscheman of The fnvBut the world behind it aims to pay the least amount of taxes everywhere in the world. Even if a country like India takes measures to allow tech companies to contribute to society, Uber will also largely succeed in getting out of it. European Union and Organization for Economic Cooperation and Development (Organization for Economic Cooperation and Development) measures taken, and fnv‘over there. “If a powerful country like India can’t really get Uber to pay, then how do you think things are going in developing countries?”
Arjan Legor says international cooperation certainly provides hope for the distant future. ‘In the Organization for Economic Cooperation and Development The G20 talks about a minimum profit tax rate, but it would be better to have a system in which the global profit of a multinational company is determined in one place and proportionate taxes are levied in different countries. It’s great that Biden has now talked about taxing large multinational corporations. Because if the big countries support it, such an international tax system will certainly not be without an opportunity.
Sales tax isn’t the only government regulation Uber avoids. Because the company considers taxi drivers and meal providers as self-employed people – not as employees – the company avoided at least € 29 million in taxes and social security contributions in the Netherlands last year. fnv In a white paper. “Fortunately, we’re seeing a change when it comes to these types of platform companies,” Asscheman says. Until recently, everyone was cheering for Amazon and Uber activities, but the dark sides are now seen, too. The UK Supreme Court ruled in February that UK Uber drivers also have a right to workers’ rights. This is a start. We’ve also started a lawsuit about this in the Netherlands, which has absolutely no chance. Because now everyone sees avoiding taxes and employee contributions undermining our social system.
Collaboration with Martin Van Donne (Australia)