Collecting back taxes from Uber tough, say authorities

Apart from the company contesting the department’s claims, the fact that it has sold its Southeast Asia business to its former competitor Grab adds to the difficult, department deputy director Tran Ngoc Tam said at a recent half-year review meeting.

He said the department had sent documents to many local banks asking them to deduct the full amount of money transferred to Uber’s bank account as a form of tax enforcement, but it turned out that the firm had not opened any account in the country.

After an inspection that it carried out in September 2017, the department had requested the Vietnamese branch of Uber International Services Holding B.V. based in the Netherlands to pay VND66.68 billion ($2.91 million) in back taxes and fines for violating tax laws.

However, the company appealed that decision, telling the General Department of Taxation as well as the 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.

The Ministry of Finance issued an official reply, which rejected Uber’s argument. In response, the company filed two lawsuits against the Ho Chi Minh City Tax Department.

Tam said at the meeting that while the court was handling the lawsuit, there was no certain time frame within which the issue could be resolved. He said it would be difficult to collect taxes and fine from Uber even if the department were to win the lawsuit, because the company did not have a bank account in Vietnam.

Furthermore, the company had sold its Southeast Asia operations to competitor Grab on April 8, which means it no longer had a presence in Vietnam.