Uber has revolutionised transport in Australia. But will taxpayers get anything in return?

ATO to force Uber drivers to pay GST

Uber is to mount a legal challenge against the Australian Tax Office after a decision to force drivers to register and pay GST.

Prime Minister Malcolm Turnbull has praised ride-sharing company Uber as part of the “agile” economy he envisages for Australia.

But the first set of income accounts lodged by Uber Australia shows the company is using the same financial structure of fellow multinationals operating in Australia where the local entity is saddled with large, profit-erasing loans originating from tax havens like the Netherlands.

Uber Australia, which is locked in a court battle with the Australian Tax Office over whether its drivers should collect GST, has submitted accounts with the Australian Securities and Investment Commission covering the nine months of its start-up phase up to June 2013.

While the numbers are tiny compared to the estimated revenue from the five million rides a year Uber is delivering in 2015, a tax expert said the company’s initial debt structure should ring alarm bells for the Coalition’s pursuit of tax avoidance by multinationals.

Uber and Airbnb have been called to front the Senate tax avoidance inquiry next month. Their more established multinational tech rivals, Google, Apple and Microsoft were criticised by senators for not adequately explaining why so much of their Australian-generated sales revenue is shifted into complex offshore structures in Ireland, the Netherlands and Singapore.

According to its first financial report, Uber Australia had initial borrowings of $980,000 from related entities in the Netherlands and the United States. The debt outstripped the company’s first annual revenue of $804,000.

Companies with gearing levels above 60 per cent can claim repayments as a tax deduction.

Uber, which has grown to become a worldwide business estimated to be worth $US20 billion, listed its first company tax bill in Australia as just $18,000, according to its ASIC filing.

The loans to the Australian arm of Uber are listed in its accounts as having come from San Francisco-based “Uber Inc” and “Uber International” registered in the Netherlands

In a separate ASIC filing, Uber Australia lists its sole shareholder as Uber International Holdings BV, a company based in Amsterdam. According to reports, that company is owned by a type of Dutch partnership known as a “commanditaire vennootschap” or CV.

Uber International CV is incorporated in the zero tax jurisdiction of Bermuda.

Jason Ward, who wrote last year’s landmark report into Australian corporate tax avoidance for the Tax Justice Network, said Uber Australia’s deep links to the Netherlands “raises immediate suspicion” around tax avoidance. “The Netherlands is an extremely notorious tax haven and profit shelter country,” he said.

“It’s hard to read a whole lot into [Uber Australia’s accounts] because there is so little information there but it seems very likely to be a set-up for reducing Australian profits and taxes.”

A spokesman for Uber said the company would not address specific questions about its debt structure.

The Senate inquiry has given the company until October 5 to make a submission before a likely public hearing later that month.