Saturday, August 10, 2019
Bloomberg, Uber Created a $6.1 Billion Dutch Weapon to Avoid Paying Taxes:
Uber, responding to a European crackdown on offshore tax havens, created a $6.1 billion Dutch tax deduction that will help the company reduce a chunk of its global tax bill for years to come.
San Francisco-based Uber generated the outsized deduction before its initial public offering in May because it moved some of its offshore subsidiaries to different countries as a result of new European Union rules governing multinational companies.
The $6.1 billion deduction came through an increase in the value of intellectual property that Uber transferred between its offshore subsidiaries, according to the company’s first quarterly filing. When an intangible asset increases in value, so do the tax deductions that come with its use over time.
“It’s safe to say that Uber will not be paying any taxes for the foreseeable future,” said Robert Willens, an independent tax and accounting expert in New York. ...
[T]he size of the tax savings took experts by surprise.
Willens, the tax expert, called the $6.1 billion deduction “unusual” relative to Uber’s roughly $73 billion market value. Another independent tax and accounting expert, Frank Vari in Boston, said he was “surprised” that the deduction was “that large.” The benefit reflected the lofty value that Uber had given its IP when it moved its subsidiaries to new locations.