Name: Insights: Following The Money at Uber
Uploaded: 2020-02-20
Duration: 2 min 25 s
Description: Fortune untangles the trail behind Uber's elaborate tax scheme. Assistant managing editor Brian O'keefe reports.

[MUSIC PLAYING] SPEAKER: In just five years, Uber has expanded from its home base in San Francisco to more than 60 countries around the globe by making it simple to hail a car with your smartphone. But as Fortune found out, behind the app is a complicated corporate structure designed to limit the taxes that Uber pays on rides outside the US. Following exactly where the money goes requires navigating more twists and turns than a cab ride through Rome. Let's say, you've taken an Uber ride in the Italian capital and paid the equivalent of $20. That $20 goes to a company based in the Netherlands called Uber BV. Uber BV sends 80% of the money back to the driver through another Dutch company called Rasier. The Italian government will eventually get some tax revenue from your Uber ride in Rome when the driver self-reports that income. The remaining 20% of your fare $4 out of the original 20 stays with Uber BV initially, but that doesn't mean that it all gets taxed. Uber ends up paying taxes to the Dutch government on just 1% of that revenue, the equivalent of $0.01 out of the original $20. First, Uber deducts cost, a small portion of which will eventually filter back to the Italian government through taxes paid by Uber's local subsidiary in Italy. Then, Uber BV sends the remaining money, everything up to 1% of revenue as a royalty payment to another Dutch company called Uber International CV, which lists its headquarters at an address in Bermuda. Because Uber International CV is a partnership controlled by Uber's US business, the Dutch don't collect taxes on its income. Bermuda charges no tax on corporate income. And US tax authorities see Uber international CV as a Dutch company and allow it to defer US taxes indefinitely. Only a small royalty that Uber International CV pays back to Uber in the US will be taxable. The result, almost none of Uber International CV's income, a large portion of Uber sales around the world is taxed. Uber may have sprung out of the US tech scene, but its home country won't end up collecting taxes on much of its income. 

Insights: Following The Money at Uber

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Following The Money at Uber

Fortune untangles the trail behind Uber's elaborate tax scheme. Assistant managing editor Brian O'keefe reports.

In just five years, Uber has expanded from its home base in San Francisco more than 60 countries around the globe by making it simple to hail a car with your smart. But it's fortunate. Found out. Behind the APP is a complicated corporate structure designed to limit the taxes that uber pasar rides outside the U. S. Following. Exactly where the money goes requires navigating more twists and turns than a cab ride. Let's say you've taken an uber ride in the Italian capital paid the equivalent of $20 that $20 goes to a company based in the Netherlands called uber TV number B V. Since 80% of the money back to the driver through another Dutch company called Rosier, Italian government will eventually get tax revenue from your override in Rome when the driver self reports that in the remaining 20% of your fair $4 out of the original 20 days with B V initially. But that doesn't mean that it all gets uber ends up paying taxes to the Dutch government on just 1% of that revenue equivalent of one cent out of the original $20 1st uber deduct costs, a small portion of which will eventually filter back to the Italian government taxes paid by local subsidiary in Italy. Then Hubert B. V sends the remaining money everything up to 1% of revenue. A za royalty payment to another Dutch company called Uber International TV, which listed headquarters at an address in Bermuda. Because Uber International TV is a partnership controlled by Huber's US, the Dutch don't collect taxes on its income. Bermuda charges no tax on corporate income and U. S tax authorities see Super International TV as a Dutch company and allow it to defer US taxes indefinitely. Only a small royalty that uber international TV pays back to uber in the U. S. Will be taxed. Result almost none of uber international TV's income. A large portion of Cooper's sails around the world is taxed. Uber may have sprung out of the U. S. Texting, but it's home. Country won't end up collecting taxes on much of it.