Uber must pay 10% tax once licensed in Vietnam: taxman

December 26, 2014 | 09:30

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Uber will have to pay 10 percent taxes on its total revenue if it is licensed to legally operate in Vietnam, according to the General Taxation Department under the Ministry of Finance.

Vietnam will tax Uber once it is allowed to legitimately offer services in the country, Deputy Minister of Finance Do Hoang Anh Tuan said on Wednesday.

The General Taxation Department under the ministry elaborated that Uber will have to pay a five percent corporate income tax on the total revenue it earns from the local market if the company is licensed.

It added that Uber International B.V., which pockets 20 percent of what passengers pay for Uber services, will have to pay another five percent value added tax on its turnover in the Vietnamese market in that case.

For the local transport firms directly partnering with Uber International B.V., they will have to pay tax on the remaining 80 percent of the payment.

In addition, those businesses will also be liable for some other fees and all other kinds of taxes arising in Vietnam that the taxman cannot collect from Uber, the department said.

The General Taxation Department added that Uber’s is a new business model in Vietnam, which is expected to expand to other fields such as tourism, hospitality, and aviation in the future.

To manage earnings from those services, the department suggested working with the Ministry of Industry and Trade and the State Bank of Vietnam on verifying non-cash transactions or intermediary payment services.

Uber, which connects passengers and drivers via a smartphone app, has grabbed national headlines as it has won over many passengers for its fast and cheap rides, all while facing legal challenges in Vietnam.

It started offering services in the Southeast Asian country on July 31, with car rides now available in both Hanoi and Ho Chi Minh City.

Uber customers use the app to request rides and track their reserved vehicle's location, with information including the fare and estimated arrival time made known before they get in the car. The complete fare is automatically billed to the customer's credit card at the end of a ride.

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