Uber pays P41 million in tax deficiencies to avoid closure

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Uber back on the road after paying P190-M fine
Driver operators outside the Uber main office in Mandaluyong City -- REUTERS/DONDI TAWATAO

The Bureau of Internal Revenue (BIR) said Uber Systems, Inc. paid P41.15 million in value-added tax (VAT) deficiencies to avoid being suspended or closed.

In a statement sent to reporters on Thursday, BIR said Uber paid P41.15 million in VAT deficiencies covering the period of July to December 2016, avoiding the ride-hailing service’s imminent closure under the Oplan Kandado Program of the BIR.

Although Uber filed its VAT returns on time, BIR said, it declared its domestic sales amounting to P413.85 million as zero-rated.

The declaration is against the cross border doctrine, which means that all goods and services consumed or rendered within the Philippine territory are subject to 12% VAT.

“The act of Uber of 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,” the taxing authority said in the statement.

According to the section 115 of the Tax Code, the BIR is authorized to suspend or shut down the business operations of a taxpayer for a period of not less than five days for failing to file correct VAT returns among others. — Karl Angelo N. Vidal