Uber has said it is under audit by tax authorities both in the US and abroad, and expects its unrecognised tax benefits to be reduced by at least $141m over the next year.

The ride-hailing app, which made its public debut last month, said the Internal Revenue Service is examining the company’s taxes for 2013 and 2014, according to a filing with the Securities and Exchange Commission. The audit is related to a change in how Uber classified intellectual property in the US.

Uber also said it was “under examination by various state and foreign tax authorities”. The audits were previously disclosed in the company’s registration statement for its initial public offering.

The $141m reduction in gross unrecognised tax benefits is related to the company’s transfer pricing positions, which refers to prices charged on transactions between corporate subsidies. The strategy can be used to reduce taxes by shifting revenues to low-tax jurisdictions, and has been the source of disputes between tax authorities and US technology companies including Apple, Google and Amazon.

In the first quarter, Uber said its unrecognised tax benefits rose to $1.3bn.

Uber said it believes it has adequate amounts reserved in these jurisdictions to pay any additional tax bills that may arise. It added that taxes from 2010 to 2019 could be subject to adjustments in major markets such as the US, India, Brazil and the UK.

Uber shares, which are down 8 per cent from their May IPO price of $45, slid less than 1 per cent in morning trading on Tuesday in New York.

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The company said it was “highly uncertain” when the audits would be resolved, adding that it was “reasonably possible that the balance of gross unrecognised tax benefits could significantly change in the next 12 months”.

Uber last week said its losses more that doubled in the first quarter, but noted that competition from Lyft had eased. 

Separately on Tuesday, the banks that underwrote Uber’s IPO began to release reports and ratings on the stock. At least 10 issued buy or outperform ratings, including Morgan Stanley, Goldman Sachs, Bank of America and Barclays.

Via Financial Times