Uber pays BIR P41 million in VAT deficiencies

Uber Systems Inc. has remitted more than P41 million to pay for its value-added tax (VAT) deficiencies.

In an emailed statement on Thursday, the Bureau of Internal Revenue (BIR) said the company paid P41.15 million “to avoid the suspension or closure of its business operations.”

According to the BIR, Uber is registered with the Land Transportation Franchising and Regulatory Board (LTFRB) as a Transportation Network Company (TNC), employing a pool of Transportation Network Vehicle Service (TNVS) operators and drivers.

“As such TNC, all of UBER’s earnings are derived from the transportation services made by its TNVS operators and drivers within the Philippines,” it said.

“Hence, its gross receipts from such sale of services are subject to the 12-percent VAT and not to the 3-percent common carrier’s tax,” the bureau said.

The BIR said noted that Uber filed its VAT returns on time, but declared its P413.85 million in service sales as zero-rated sales.

The bureau argued that transactions consumed within the Philippines carry a 12-percent VAT.

“The act of UBER ... declaring its sale of services as zero-rated and not paying the VAT due thereon is a clear violation of the Tax Code which is one of the grounds for its suspension or temporary closure,” it said.

However, with its VAT deficiencies covered, Uber was able to avoid having its operations closed or suspended by the government, the BIR said. —VDS, GMA News