Tax authorities face losing over $2 million in taxes from Uber

Ho Chi Minh City Tax Department cannot currently collect taxes from Uber

At the General Department of Tax’s first half meeting of the year on July 20, director of Ho Chi Minh City Department Tran Ngoc Tam said that the city’s court is handling the tax evasion issue, but the likelihood of being able to collect taxes from Uber is very low.

“Uber is no longer in Vietnam, so the authority cannot carry out the tax-collection. The issue is under the city’s Court, but the time it will take to handle this is difficult to determine,” Tam said.

Currently, Ho Chi Minh City Tax Department cannot apply coercive measures to collect VND53.3 billion ($2.36 million) in taxes from Uber because the department is facing a lawsuit from the firm, issued in late March.

Even if the department wins the case, the chance of it being able to actually claim the taxes will be very low because Uber has never established its representative office or bank accounts in Vietnam.

Dantri.com.vn quoted deputy director of Inspection Department Dang Duy Khanh as saying that the tax obligation will be carried out in accordance with Civil Code.

“The clauses of agreement between Grab and Uber need to be examined to determine who is under tax obligation. If Grab’s contract to buy Uber stipulates that Grab takes responsibility for paying taxes to the government on behalf of Uber, then Grab will be under tax obligation,” Khanh added.

Regarding the issue, on the sidelines of the National Assembly meeting held in March, the deputy minister of finance said that the parent company has to carry out its subsidiary’s obligation after merging, according to dantri.com.vn.

However, Grab attests to not relate to Uber’s VND53.3-billion ($2.36 million) taxes. “Grab has not bought Uber’s legal status in Vietnam,” said Grab’s representative.

After completion of the inspection on Uber, in September 2017 Ho Chi Minh City Tax Department decided to apply administrative sanctions and collect VND66.68 billion ($2.95 million) in fines and taxes from Uber B.V.

As of late 2017, Uber B.V had only paid VND13.3 billion ($588,500) out of a total VND66.68 billion ($2.95 million) in taxes. Since that time, the firm has twice sued the department because Uber supposes that it has no tax obligation in Vietnam in accordance with the Double Taxation Avoidance Agreement between the Netherlands and Vietnam.

Therefore, the remaining VND53.3 billion ($2.36 million) is in a hard-to-collect situation.