Uber and Saigon tax man still at odds

By Thanh Le   June 23, 2018 | 04:00 am PT
Uber and Saigon tax man still at odds
Uber drivers' cars are parked outside the Ministry of Transportation building during a protest in Taipei, Taiwan February 26, 2017. Photo by Reuters/Tyrone Siu.
City says Uber has to pay millions of U.S dollars in back taxes, ride-hailing firm says it is not subject to several tariffs.

The tax department of Ho Chi Minh City and ride-hailing firm failed to find common ground at a meeting organized by the local court to sort out a tax dispute.

The department continued to insist that Uber has to pay its back taxes and the firm insisted that it was not subject to them in the first place.

Ho Chi Minh City has been trying to make Uber B.V. pay taxes since last year, saying that the Netherlands-based company had operated in the city as a transport firm.

Uber B.V. did not just provide technology services, but directly managed and carried out all transportation business activities, from assigning drivers to setting prices and running promotions, and it paid drivers, which it described as partners, once a week.

The company should be subjected to taxes like any other transport company, a tax department representative told the reconciliation at the court on Friday.

In September last year, the department ordered 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, complaining to the Ministry of Finance that it should not be subject to certain taxes under 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 discovering the company does not have a bank account in Vietnam.

Uber has since filed two lawsuits against the department and refused to pay the remaining VND53 billion demanded of it.

At the reconciliation court, an Uber B.V. representative reiterated the company’s stand that it just provided a service via mobile app to connect drivers with passengers.

“As the two sides are still at odds with each other and no progress has been made towards reconciliation, the court will pass its judgment in the coming time,” a tax department representative told VnExpress.

Uber officially left Vietnam on June 10 after it striking a deal to transfer its operations in Southeast Asia to Grab, the region’s dominant ride-hailing company.

Grab Vietnam earlier this month said it would not be paying any back taxes Uber might still owe in Vietnam.

And apparently, the authorities were not happy with that.

An official from HCMC’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.

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