Grab says it will not pay any back taxes owed by Uber in Vietnam

Ride-hailing firm Grab Vietnam on Thursday said it would not be paying any back taxes rival Uber might still owe in Vietnam despite its deal to acquire the latter's operations in Southeast Asia.

"This matter is Uber's responsibility. Grab did not buy Uber's legal status in Vietnam, which is the unit bearing all legal responsibilities for settling tax-related issues with the tax department," a Grab representative told VnExpress, adding that all questions related to the issue should instead be sent to Uber.

An official from Ho Chi Minh City's tax department said that the department is still waiting for Grab to submit an official report on the acquisition deal before deciding on how to handle the issue.

Commenting on Grab's announcement, lawyer Doan Van Hau, chairman of the Vietnam Lawyers' Commercial Arbitration Center, said Grab's refusal is in violation of Vietnamese law and international practices.

Quoting Vietnam's Enterprise Law, he stressed that Grab as the acquirer is responsible for paying all back taxes owed by its target firm Uber.

"Even if Uber and Grab have their own agreements on how to handle this issue, then those agreements must still conform to Vietnamese law," Hau said.

In September last year, Ho Chi Minh City's tax department ordered the Netherlands-based Uber B.V. to pay VND66.7 billion ($2.91 million) in back taxes and tax evasion penalties by December 23. However, the company only paid VND13.3 billion after complaining to the Ministry of Finance that it should not be subject to certain taxes according to Vietnam’s agreement on double taxation avoidance with the Netherlands.

The tax department subsequently asked five local commercial banks to help it collect the outstanding sum from Uber's accounts, but failed after disovering the company does not have a bank account in Vietnam.

Uber has since filed two lawsuits against the department and has yet to pay the remaining VND53 billion.