<div> Taxation of the Digitalisation of the Economy May 2020 Agenda  1. Background 02 Amount A phasing timeline 03 Nexus and scope of Amount A 04 Amount A calculation - taxable income 05 Amount B certainty 06 Dispute prevention and dispute resolution 07 Pillar 2 features 8. Questions Phasing the Implementation of the Unified Approach  Given the global pandemic, the Inclusive Framework’s (IF’s) work on Digital Taxation has been slowed. Realizing that things that linger often die, Uber is fully supportive of continuing the work on Digital Taxation.   We understand that, given current circumstances, the IF is considering a phased approach. Specifically, agreeing on a consensus solution for digital business in 2020 with a commitment to “finish the work” for consumer-facing businesses (CFB) in 2021.  This presentation sets out Uber’s view of what needs to occur to make a “phased-in” approach workable and something Uber would support. Amount A phasing - timeline goals            Single Coherent Law Phased approach of Pillar 1 for Automated Digital Services (ADS) and CFB should result in a single coherent law that would ultimately apply equally to both.            “DST Rollback” Companies that would have paid less tax under Amount A than under digital services tax (DST, if rolled back to 2020) will have the right to develop documentation to claim a refund of excess DSTs.  202020212022         <table><tr><td>●</td><td>Development of the</td><td>●</td><td>Multilateral Agreement</td><td>● Local legislation</td></tr><tr><td> </td><td>design feature for</td><td> </td><td>(MLA) for ADS</td><td><div class="indented">adopted for ADS (and</div></td></tr><tr><td> </td><td>Amount A for ADS.</td><td> </td><td>available for signature</td><td><div class="indented">possible CFB)</div></td></tr><tr><td>●</td><td>Consensus reached on</td><td>●</td><td>Remaining design</td><td>● MLA for CFB available</td></tr><tr><td> </td><td>ADS and a timeline for</td><td> </td><td>features relevant to</td><td><div class="indented">for signature</div></td></tr><tr><td> </td><td>next steps.</td><td> </td><td>CFB agreed</td><td> </td></tr><tr><td> </td><td> </td><td>●</td><td>Consensus reached on</td><td> </td></tr><tr><td> </td><td> </td><td> </td><td>CFB and Amount B</td><td> </td></tr></table> Nexus and scope of Amount A  Important considerations This discussion assumes Amount A will be implemented as a “safe harbor”. Companies may elect to subject their in-scope businesses to the new taxing right in exchange for anticipated tax benefits, including, but not limited to relief from unilateral measures.    Equal playing field            <div class="indented">ADS</div>     <div class="indented"><div class="indented">Safe Harbor</div></div> Nexus and scope of Amount A           Equal playing fieldDefining ADSSafe Harbor  <ul><li>As a practical matter, ADS businesses will not have optionality. Most, if not all, will opt-in for the safe harbor.</li></ul> <ul><li>There must be a firm commitment to include CFB by 2021.</li></ul> <ul><li>At a minimum, CFB must be defined to capture CFBs that eﬀectively compete with ADS businesses (e.g., UberEats vs national chain restaurant self-delivery).</li></ul>   <table><tr><td>●</td><td>Framework should be clear enough</td><td>●</td><td colspan="2">Companies with multiple in scope operating</td></tr><tr><td> </td><td>to provide certainty and reduce</td><td> </td><td colspan="2">segments should be able to opt in on a</td></tr><tr><td> </td><td>dispute.</td><td> </td><td colspan="2">segment-by-segment basis.</td></tr><tr><td>●</td><td>Framework necessary to distinguish</td><td>●</td><td colspan="2">Unilateral measure relief under Amount A:</td></tr><tr><td> </td><td>ADS which are also CFB.</td><td> </td><td>●</td><td>DST, and similar taxes, cannot be</td></tr><tr><td> </td><td> </td><td> </td><td> </td><td>applied to a Company’s segments</td></tr><tr><td> </td><td> </td><td> </td><td> </td><td>which have opted in to Amount A.</td></tr><tr><td> </td><td> </td><td> </td><td>●</td><td>Other unilateral measures</td></tr><tr><td> </td><td> </td><td> </td><td> </td><td>practically targeting digital</td></tr><tr><td> </td><td> </td><td> </td><td> </td><td>companies are prohibited.</td></tr><tr><td> </td><td> </td><td>●</td><td colspan="2">New MLA to provide certainty barring</td></tr><tr><td> </td><td> </td><td> </td><td colspan="2">unilateral measures.</td></tr></table>   Amount A calculation - taxable income     Calculating taxable income <ul><li>Starting point: audited financial statements as prepared.</li></ul> <ul><li>Very limited adjustments should be made</li></ul> <ul><ul><li>Permanent Diﬀerences</li></ul></ul> <ul><ul><li>Goodwill and intangible amortization deduction following common tax principles.</li></ul></ul> <ul><ul><li>Non-operating income and gain or loss from business divestiture excluded.</li></ul></ul> <ul><ul><li>Non-consolidated income excluded.</li></ul></ul> <ul><ul><li>Stock-based compensation calculated under common tax principles.</li></ul></ul> <ul><ul><li>Long Term Temporary Diﬀerences</li></ul></ul> <ul><ul><li>Inventory and other reserves should follow common tax treatment.</li></ul></ul> <ul><ul><li>Amortization and depreciation schedules should follow common tax useful lives.</li></ul></ul>    Treatment of losses <ul><li>Amount A should allow for losses from at least 2015 forward. These should be residual losses (i.e., net of routine profits).</li></ul> <ul><li>Losses should be bucketed and carried forward by relevant Amount A category.</li></ul> Calculating Amount A <ul><li>Centralized costs of the group are allocated among the three buckets.</li></ul> <ul><li>Separate profit splits are performed for the ADS and CFB buckets to allocate Amount A to market jurisdictions.</li></ul> <ul><li>Surrender deductions are allocated among residual profit entities according to value added costs.</li></ul> Amount B certainty     Activities guidelines Clear guidance on which distribution activities earn routine returns under Amount B.       Strategic marketing exemption As research and development is exempt, these functions should follow the same treatment.     De minimus rule Additional functions beyond distribution should not prevent the application of Amount B.       Address industry diﬀerences The use of diﬀerent profit indicators across industries should better approximate arm’s-length results.  Dispute preventionDispute resolution        Representative Panels        Non-binding Arbitration        Panel Decision RejectedBack-end Arbitration  Advance binding resolution of Amount A (and B) issues must be available <ul><li>Participation of HQ countries, major markets and other representative jurisdictions</li></ul> <ul><li>5 year term with renewal option</li></ul> <ul><li>Panel members are bound</li></ul> If any relevant non-Panel countries do not agree with the Panel decision, mandatory non-binding arbitration applies <ul><li>Inclusive process</li></ul> <ul><li>Intended to obtain consensus</li></ul> <ul><li>Intended to avoid back end arbitration</li></ul> Countries that do not agree with the Panel decision become subject to mandatory binding arbitration for any future disputes <ul><li>This process should be multilateral</li></ul> ‘Final best oﬀer’ system <ul><li>The binding resolution process should allow the Panel decision to be presented as a resolution option</li></ul>   Pillar 2 features     Anti-hybrids Where there is overlap, anti-hybrid rules (see Action 2) should take precedence over any undertaxed payment rules. This will avoid unnecessary complexities.     ETR Testing Eﬀective tax rate testing should determine the tax base using similar principles for Amount A. Additional temporary diﬀerence adjustments will also be needed for tax attribute carryovers.    IIR Primacy The CFC Income Inclusion Rule should have primacy over under taxed payment rules.  U.S. GILTI The U.S. global intangible low-taxed income (GILTI) rules should constitute a qualified CFC inclusion regime.        Questions</div>

Uber Presents Views on Phased Approach to Digitalization of Economy

Uber Presents Views on Phased Approach to Digitalization of Economy

Uber Technologies Inc.

Treasury has released a slide presentation from Uber, which provides its view of the steps needed to make a phased approach to resolving tax issues in the digitalization of the economy workable.

Treasury has released a slide presentation from Uber, which provides its view of the steps needed to make a phased approach to resolving tax issues in the digitalization of the economy workable.