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Taxman struggling to get back taxes from Uber

Released at: 16:20, 03/02/2018

Taxman struggling to get back taxes from Uber

Photo from vietq.vn

Just under $2mn still outstanding from tax evasion ruling last month.

by Quang Huy

The Ho Chi Minh City Department of Taxation is still attempting to collect back taxes and penalties from the Vietnamese branch of the Netherlands-based Uber International Services Holding B.V., after determining the ride-hailing company has not registered any bank accounts in Vietnam.

A court in the city last month dismissed a lawsuit against the tax department by Uber Vietnam after it asked the court to direct the department not to impose tax payments in the millions of dollars.

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

Instead, Uber Vietnam filed a lawsuit against the department. The court said it dismissed 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 will continue until tax authorities collect the $2.34 million.

A month later, the tax department is yet to recover even a penny in tax from Uber, Deputy Minister of Finance Ms. Vu Thi Mai told a government media briefing on February 2.

Vietnamese authorities are reviewing the law to identify a way to collect the tax.

In September last year the department ordered Uber to pay VND66.7 billion ($2.93 million) of back taxes and tax evasion penalties by December 23.

But the company has only paid VND13.3 billion ($584,000). It has complained to the Ministry of Finance that it is not subject to taxes according to Vietnam’s double taxation agreement with the Netherlands, where it is based.

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

The finance ministry has said the company must pay taxes on income generated in Vietnam.

Traditional taxi companies in Vietnam have used the tax issues to accuse Uber and Grab of creating unhealthy competition. Both Uber and Grab have played down the accusations, saying they do not perform quasi-taxi services to evade tax nor resort to electronic contracts to dodge their financial obligations, and have fully paid taxes per requirements.

Uber Vietnam has reiterated it has fulfilled all of its tax obligations in Vietnam and strictly followed guidance from the taxman. It has declared and paid taxes on behalf of Uber B.V.

Similarly, Grab Vietnam said it was working closely with local tax authorities and has adhered to all relevant regulations.

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