> In 2019, Uber claimed $4.5 billion in global operating losses (excluding the US and China) for tax purposes – in reality, it brought in $5.8 billion in operating revenue
This sentence makes me feel like the article author does not understand the difference between profit and revenue. The wording makes it seem like there is something nefarious about being a loss making company.
Uber's global 2020 revenue was 11 billion, with a net income of -7 billion.
> a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found
I just have no idea how any researcher would be able to compute this. Corporate taxes are based on profits. In order to pay taxes, a corporation must actually make money. Did the researchers forecast a 20 year P&L and compute lost tax revenue based on their hypothetical financials?
Buying stock options is a great example of where you might end up with a fixed tax break.
Buy 1000 options at your strike price ex: $1, pay tax on their current estimated value (say the value is estimated at $100, you pay tax on (100 - 1) * 1000 = $99,000 of "value" that you gained, probably about 20k).
2 years later: Boom, company goes out of business. That stock valued at 99k was actually worth 0k, but you paid taxes on 99k.
So now you can write off approximately $3,500 (for this case) in taxes every year until you've written off that 20k you paid in taxes - about 6 years in this case.
Has absolutely zilch to do with how much your P&L are. Those will still influence your final tax bill, of course, but they don't touch the break.
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Now - this case is not "avoidance" since you've paid the tax and are getting it back, but there are a lot of similar breaks related to loans, and the interest you're paying on loans - especially if the thing you're using that loan for is also taxed.
So it's VERY possible that Uber has generated a $1 billion tax break every year through loan shenanigans. That doesn't mean that they won't pay taxes, it just means the yearly bill will be 1 billion lower than it probably ought to have been.
This sentence makes me feel like the article author does not understand the difference between profit and revenue. The wording makes it seem like there is something nefarious about being a loss making company.
Uber's global 2020 revenue was 11 billion, with a net income of -7 billion.
> a manuever that grants the company a $1 billion tax break every year for the next 20 years, the researchers found
I just have no idea how any researcher would be able to compute this. Corporate taxes are based on profits. In order to pay taxes, a corporation must actually make money. Did the researchers forecast a 20 year P&L and compute lost tax revenue based on their hypothetical financials?