UBER SYSTEMS, Inc. (Uber Philippines) has paid P41.15 million to the Bureau of Internal Revenue (BIR), settling its value added tax (VAT) deficiency for the second half of 2017 and avoiding possible suspension or closure of its operations.
“The payment, and the imminent closure under the Oplan Kandado Program of the BIR that was avoided, was the culmination of the audit of Uber’s VAT compliance for the period July 1 to Dec. 31, 2016,” the tax collection agency said in a statement.
The audit was conducted by Revenue District Office (RDO) No. 47 of Makati City.
Based on the records of the investigation, the BIR said Uber is registered as a transportation network company with the Land Transportation Franchising & Regulatory Board (LTFRB) with 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. Hence, its gross receipts from such sale of services is subject to the 12% VAT and not to the 3% common carrier’s tax,” the BIR said.
While Uber filed VAT returns, the BIR said the company declared sale of services in the Philippines, which stood at P413.85 million, as “zero-rated sales.”
The agency noted that Uber’s decision to declare sale of services as zero-rated and its failure to pay VAT on this “is a clear violation of the Tax Code which is one of the grounds for its suspension or temporary closure.”
Under Section 115 of the Tax Code, the BIR can suspend or close the business operations of a taxpayer for a period of not less than five days for failure to: (1) register; (2) issue VAT official receipts or sales invoices; (3) file correct VAT returns; or (4) pay the correct VAT.
In August 2017, the LTFRB slapped Uber with a one-month suspension for disregarding an order to stop accepting new driver applications. Uber later paid a P190-million fine to be have its suspension lifted.
