How a company worth billions pays pennies on a million for tax
The company that is not a taxi company, which has drivers that are not taxi drivers, who carry people around that are not clients, Uber, is not only killing the taxi business, it is also avoiding paying taxes.
The company uses a trick known as “the double-Dutch.” It is perfectly legal.
According to Fortune magazine, Uber International, based on an offshore law firm at the Bermuda islands collects a 20% commission for each ride to each “peer driver.” That company collects, but holds only 1%. 19% goes to Uber international, a company based in the Netherlands, as “royalties.” Importantly, royalties in the Netherlands are tax free.
That is not merely for European, but also for US revenues. It is estimated the company is worth $50 bn, so 1% of billions is still a lot of money.
Of that 1%, the Bermuda company collecting gives a 14,5% to a company based in Delaware, called Uber Technologies. That 14,5% of the 1% of the total ride fair is what is taxed. That is not taxed 100% of course, but a reasonable amount.
The best part of this story is that Dutch courts have ruled that Uberpop services are illegal.
