Vietnam still struggles to make Uber pay back taxes

The tax department in Ho Chi Minh City is still stuck at collecting tax from the Vietnamese branch of Uber International Services Holding B.V. based in the Netherlands after finding out that it has not registered for any bank accounts in Vietnam.

A court in the city last month dismissed a lawsuit against the city’s tax department by Uber Vietnam after the ride-hailing firm asked the court to stop the department from charging it with a million-dollar sum of tax.

The department earlier asked five local commercial banks to help collect more than VND53 billion ($2.34 million) of what it believed was back taxes from Uber between January 1 and 10 of 2017.

Instead, Uber Vietnam then filed a lawsuit against the department.

The court said it dropped the lawsuit because Uber Vietnam “does not have the required legal status for such a case.”

It was decided by the court that Uber Vietnam will have to transfer its income into the bank accounts of the tax department instead of handing it over to its headquarters in the Netherlands as it has been doing so far.

This process will last until the tax authorities collect enough $2.34 million in tax from the company.

But a month later, the HCMC’s tax department has yet to recover an even a penny in tax from Uber, Vu Thi Mai, deputy Minister of Finance, told a government news briefing on Friday.

The Vietnamese authorities are reviewing the law more carefully to find a way to collect the tax.

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

But the company has only paid VND13.3 billion. It has complained to Vietnam’s Ministry of Finance that it is not subject to paying taxes according to Vietnam’s agreement on double taxation avoidance with the Netherlands, where it is based.

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

Yet Vietnam’s finance ministry said the company has to pay taxes for the income it generates in Vietnam.

Traditional taxi companies in Vietnam have used the tax issues to accuse Uber and Grab for putting up unhealthy competition.