Uber threatens to take tax department to court

Uber has agreed to pay its tax arrears but the case is not closed yet

Le Thi Thu Huong, deputy director of the Ho Chi Minh City Department of Taxation told newswire Vneconomy that Uber announced paying the tax arrears within one week. The tax department’s opinion is clear that the tax arrears are compliant with regulations and Uber’s decision to take the Ho Chi Minh City Department of Taxation to court is well within its rights.

Previously, after inspecting Uber’s tax records since it started operations in Vietnam in 2014 to June 2017, the Ho Chi Minh City Department of Taxation requested Uber BV to pay the tax arrears.

Notably, Uber will have to pay VND10.5 billion ($461,589) in taxes withheld, as well as VND26.3 billion ($1.16 million) of VAT and more than VND14.6 billion ($641,841) personal income tax.

Besides, the taxation authority issued a fine of VND10.3 billion ($452,805) for the company’s false tax declaration and the company will have to pay VND4.9 billion ($215,412) to even its balance.

Uber sent an official complaint about the decision to the US-ASEAN Business Council, however, which the Ministry of Finance rejected.

Following a request by the US-ASEAN Business Council, the ministry held a meeting with representatives from the council and Uber on October 18 to discuss the tax collection and how the Double Taxation Avoidance Agreement between Vietnam and the Netherlands can be applied in the case.

After inspecting the tax payments of Uber, the Ho Chi Minh City Department of Taxation verified that the firm has generated income in Vietnam from its ride-hailing services with a network of local driver partners. It matches drivers of private vehicles to those seeking taxi rides, makes decisions on rates and promotional offers, and receives payments from fares.

Uber’s revenue earned through its driver partners, who count as permanent establishments, in Vietnam for a period of 6 to 12 consecutive months. Therefore, it is subject to foreign contractor tax pursuant to Vietnamese regulations and the Vietnam-Netherlands Double Taxation Avoidance Agreement, the ministry said in the statement.

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