Uber takes HCMC’s tax department to court over $2.3 mln bill

By Le Chi   March 23, 2018 | 12:40 am PT
Uber takes HCMC’s tax department to court over $2.3 mln bill
A client uses a smartphone to book Uber service in Hanoi, Vietnam. Photo by Reuters/Kham
It's the second lawsuit the company has filed as it attempts to avoid what it claims to be undue fees.

Ride-hailing firm Uber has filed a second lawsuit against Ho Chi Minh City's tax department in relation to back taxes the department claims the company owes.

Representatives of the tax department and Uber Vietnam, a subsidiary of Uber International Services Holding B.V. based in the Netherlands, will meet in court next Monday, Nguyen Nam Binh, deputy head of the department, told VnExpress on Thursday.

On January 4, the People's Court of HCMC dismissed the first suit filed by Uber against the city’s tax department regarding a million-dollar tax bill.

The department had asked five local commercial banks to help it collect more than VND53 billion ($2.34 million) in back taxes Uber was asked to pay in January 2017, but the firm retaliated with the lawsuit.

The court said it dropped the lawsuit because Uber Vietnam “did not have the required legal status to launch such a case” and needed an authorization from Uber B.V.

The court ruled that Uber Vietnam will have to transfer its income to the tax department instead of handing it over to its headquarters in the Netherlands until it has paid the $2.34 million in arrears.

But a month later, the tax department had still not recovered any money from Uber, Vu Thi Mai, Deputy Minister of Finance, told a government news briefing in early February.

Authorities are reviewing the law to find a way of collecting the tax legally.

In September last year, the department ordered Uber to pay VND66.7 billion in back taxes and tax evasion penalties by December 23.

But the company has to date 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.

Uber International Services Holding B.V. has been repeatedly accused of tax evasion since bringing its ride-hailing business to Vietnam in mid-2014.

The ministry claims the company should have to pay taxes on the income it generates in Vietnam.

Traditional taxi companies in Vietnam have used the tax issue to accuse Uber and Grab of unhealthy competition.

Deputy Transport Minister Le Dinh Tho said on Thursday that cities and provinces where Uber and its Malaysian rival Grab are operating have the authority to limit the number of vehicles they use for their businesses.

In cases where the average number of vehicles on the streets is already high, local authorities can stop licensing more Uber and Grab vehicles and report back to the ministry at a later date, he said.

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