Fees to US parent<\/p>\n
Like most Big Tech firms operating in New Zealand, both paid hefty service fees to their US parent, reducing the amount of local revenue subject to NZ tax. <\/p>\n
Uber Eats paid an intercompany service fee of $113.8m from $100.4m in 2023. Uber paid $98.6m, near flat on the prior year.<\/p>\n
Notes with Uber\u2019s New Zealand accounts showed a cash pooling arrangement on receivables continues with Uber BV (Uber\u2019s business in the low-tax Netherlands). <\/p>\n
\u201cThe company\u2019s month-end cash balances are being swept into a single cash account owned by Uber BV\u201d the notes say. \u201cIn turn, funds are transferred from Uber BV to the Company [Uber\u2019s NZ business] for working capital.\u201d <\/p>\n
Uber, which has been involved in an ongoing court battle over whether its drivers are contractors or employees, also paid $1.2m in professional and legal fees. A spat with drivers represented by First Union and E t\u016b has been running since 2021. A Supreme Court hearing<\/a> was held in July, but a decision is not expected for months. <\/p>\n Overall business up<\/p>\n The combined revenue of Uber Eats and Uber increased from $365.2m in 2023 to $403.m in 2024, while their combined net profit increased from $3.3m to $3.5m.<\/p>\n The operations\u2019 combined income tax fell from $1.2m to $803,000.<\/p>\n Uber has made a loss in New Zealand for all but three years since it launched here in 2009, creating tax loss credits in the process.<\/p>\n The firm reported a single set of results until 2018, when it set up Portier New Zealand, which reports results for Uber Eats and Rasier New Zealand, which reports results for its ride-hail business. Both are owned by the San Francisco-based Uber International Technologies. Uber Eats launched locally in 2017.<\/p>\n Three revenue streams<\/p>\n For 2024, Uber Eats had increases in its three revenue streams: delivery revenue (which increased from $237.0m to $267.7m), subscription revenue from the Uber One programme (up from $9.4m to $16.8m) and advertising revenue as eateries paid for promoted positioning (up from $9.0m to $15m).<\/p>\n Uber\u2019s revenue from its ride-share business fell from $106.6m in 2023 to $99.2m, while its subscription revenue increased from $3.3m to $4.6m.<\/p>\n Change on the way?<\/p>\n New Zealand has backed<\/a> the OECD\u2019s \u201cPillar Two\u201d measure for a minimum global corporate tax, which is designed to minimise revenue shifting between countries in a world where big firms often have complex arrangements involving low-tax countries. <\/p>\n Microsoft NZ, for example, was formerly owned by a Microsoft subsidiary in Bermuda, but in 2021 ownership was switched<\/a> to Microsoft Ireland Research (which also owns Microsoft\u2019s NZ data centre operation).<\/p>\n Uber\u2019s 2025 NZ financials will be subject to Pillar Two, the company says in notes with its 2024 local results.<\/p>\n The OECD push is unlikely to result in Big Tech firms (largely based in the US) paying any additional tax in New Zealand, experts say<\/a>. New Zealand\u2019s corporate tax rate of 28% is above the Pillar Two global minimum of 15%. Additionally, US President Donald Trump has been hostile to the measure.<\/p>\n The current Government has dropped a plan for a flat 3% digital services tax on local revenue earned by Big Tech companies. <\/p>\n A Digital Services Tax (DST) was first floated by the Labour-led Government in 2019, but legislation to implement it was not introduced until the eve of the 2023 election and there wasn\u2019t time for it to be passed before Parliament broke up. <\/p>\n Even pre-Trump, the Ministry of Foreign Affairs and Trade had warned<\/a> that retaliatory measures on New Zealand, or New Zealand firms operating in the US, could mean minimal net gains for Inland Revenue. Concerns have also been raised that the cost of a DST would be passed on to consumers.<\/p>\n Uber has been asked for comment. The firm has previously said it complies with all tax laws and is a \u201csignificant contributor\u201d to the New Zealand economy through efficiencies and its contract drivers, who are registered for GST. <\/p>\n \u2018Please reconsider\u2019<\/p>\n