Following a request by the US-ASEAN Business Council, the ministry held a meeting with representatives from the council and Uber on October 18 to discuss the extra tax collection and how the Double Taxation Avoidance Agreement between Vietnam and the Netherlands can be applied in the case.
|Ministry rejects Uber’s complaints about tax arrears. (Photo: AFP/VNA)
After inspecting the tax payments of Uber Vietnam, the HCM City Department of Taxation verified that the taxi firm has generated income in Vietnam from its ride-hailing services on a network of local partner drivers. It matches drivers of private vehicles to those seeking taxi rides, makes decisions on rates and promotional offers and receives payments of fares from the passengers.
Uber earned revenues through transportation services provided by its partner drivers, counted as permanent establishments, in Vietnam for a period of 6 to 12 consecutive months. Therefore, it is subject to the foreign contractor taxes in compliance with the current regulations and the Vietnam-Netherlands Double Taxation Avoidance Agreement, the ministry said in the statement.
Uber entered Vietnam in June 2014. Since then, tax collection for the ride-hailing service application has remained controversial as this was the first service of its kind in the country, triggering worries about the efficiency in collecting taxes as well as the unfairness to other transport firms in the country.
According to Dang Duy Khanh from the General Department of Taxation, Uber’s total revenue from 2014 to June 30 this year was estimated at more than VND2.77 trillion (US$122.1 billion) and the firm has paid approximately VND76.9 billion (US$3.38 million) in taxes.