(Eagle News) — Uber Philippines has paid the government over P41 million in value added tax deficiencies to avoid suspension or closure of its operations.
In a statement, the Bureau of Internal Revenue said the P41.15 million the company paid represents arrears accumulated from July 1 to December 31, 2016.
The BIR said this came about after an audit found that while Uber had been paying on time, it declared its sales of P413.85 million as subject to “zero-rated sales.”
The agency said this was “contrary to the cross-border doctrine” that essentially says that “no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority.”
The BIR said that “those destined for use or consumption within the Philippines shall be imposed with the 12-percent VAT.”
“Records of investigation showed that Uber is registered with the Land Transportation Franchising and Regulatory Board (LTFRB) as a transportation network company (TNC) with a pool of transportation network vehicle service (TNVS) operators and drivers who use its transport system to get clients/passengers for transport from one place to another. It provides pre-arranged transportation services for a fee using an internet-based application or digital platform to connect passengers with drivers using personal vehicles. It likewise ensures the compliance of its TNVS operators and drivers with the LTFRB,” the BIR said.
“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 added.