Because the disease and the resulting lockdowns worldwide forced the company to reorganize much of its operations, this gave the tax department new information about company functions, personnel and decision-making, said Francois Chadwick, vice president for tax and accounting at Uber.
Chadwick spoke during a webcast hosted by KPMG LLP.
"We took a colder, harder look at not only who does what, but who was actually involved in the restructuring decisions," Chadwick said. "That afforded us an opportunity to look at who the key decision-makers actually are in the company, when it comes to some of these really, really core items to Uber."
Company restructurings, as well as arrangements for employees to work from home, shed light on how much they were involved in particular operations, Chadwick said.
Under transfer pricing principles outlined by the Organization for Economic Cooperation and Development, returns for risk related to valuable intangible assets, such as intellectual property, must be attributed to the business entities involved in their development or maintenance. The OECD fine-tuned those rules in 2015 as part of its base erosion and profit-shifting project, as mobile intangible assets are often used in structures that can shift income to low-tax jurisdictions.
Chadwick added that the market turmoil from the pandemic also gave the company more data, including from third parties, to use to price its own assets. U.S. law and international transfer pricing principles dictate that companies must price assets based on what independent companies would pay.
"We looked at what third-party companies were doing to respond to COVID-19, including contractual negotiations on various aspects," he said. "We took all of that information, and we used that as part of our analysis to work out how we were thinking about making changes to our transfer pricing."
Uber did not respond to a request for further comment.
--Editing by Vincent Sherry.
Correction: An earlier version of this article mischaracterized the information used for transfer pricing analysis. The error has been corrected.
For a reprint of this article, please contact reprints@law360.com.
