An alliance of London minicab drivers wants the EU to probe Uber’s tax arrangements and grill founder Travis Kalanick personally on the issue.
Business Insider has seen a copy of a letter sent by the London Private Hire Car Association (LPHCA) to the chair of the European Parliament’s tax committee, calling for it to probe what it alleges to be “tax avoidance on an industrial scale.”
The LPHCA represents 15,000 minicab drivers in the capital who are, obviously, biased against Uber. (Uber generally offers rides much cheaper than private-hire cars.)
The letter, written by LPHCA chair Steve Wright, says: “Uber pays no tax to speak of in the UK — nor indeed in many, if not most, of the Member States in which it operates — with the exception of the Netherlands where its European operations are domiciled for (highly reduced) tax purposes.” A spokesperson for Uber told Business Insider over email: “Uber complies with all applicable tax laws, and pays taxes in all the jurisdictions it operates in, including the UK.”
If you look at any receipt for an Uber ride in the UK, you’ll see Uber processes its jobs through its Dutch subsidiary, Uber BV. This means revenues that could be hit with UK corporation tax end up in Uber’s Dutch subsidiary and also allows Uber to charge a lower VAT rate. Dutch VAT is 0% for entrepreneurs conducting foreign business from the Netherlands, compared to the UK’s 20% rate. While it’s customers who pay VAT, not Uber, it means Uber can offer lower prices to the public. Read more….
• Uber’s receipt for a trip in London – issued by Uber BV in Amsterdam.