Transport network vehicle service (TNVS) Uber Systems Inc. paid over P41.15 million in value-added tax (VAT) deficiency to the Bureau of Internal Revenue (BIR).
In a statement on Thursday, the tax bureau said the payment was made by Uber “to avoid the suspension or closure of its business 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 December 31, 2016 conducted by revenue officers of Revenue District Office (RDO) No. 47, East Makati, Revenue Region (RR) No. 8, Makati City pursuant to a Letter of Authority,” it said.
BIR said hat as a Transportation Network Company, 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 percent VAT and not to the 3 percent common carrier’s tax.
The bureau said that although Uber religiously filed its VAT returns on time, it declared its sale of services rendered within the Philippines amounting to P413.85 million as zero-rated sales, contrary to the “cross border doctrine.”
As such, BIR said that 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.