Uber has agreed to pay taxes for its operations in Vietnam, but local tax officials say the ride-hailing service has yet to fulfill its full responsibilities.
The Netherlands-based Uber B.V authorized its Vietnamese unit to pay VND13.3 billion (US$593,750) in taxes, while the company should have paid nearly VND19 billion ($848,214), according to the Ho Chi Minh City’s tax department.
According to the General Department of Taxation, Uber Vietnam should fulfill the tax obligations on behalf of its Dutch parent firm.
For every ride offered, Uber takes 20 percent of the fare and the remainder goes into the driver’s pocket.
As requested by the General Department of Taxation, Uber Vietnam must pay a 3 percent value-added tax, plus a 2 percent corporate income tax on the 20 percent share it receives.
In the meantime, Uber drivers must also pay a 3 percent value-added tax and 1.5 percent personal income tax on their 80 percent share, though Uber Vietnam is required to deduct and pay these taxes on behalf of its drivers.
Under this regulation, the total tax owed by Uber Vietnam through June 2016 is approximately VND19 billion, according to the Ho Chi Minh City tax department.
Despite detailed payment guidelines from the taxation general department, Uber Vietnam has only agreed to pay taxes for its earnings, and repeatedly refused to do so for its drivers.
Most of the VND13.3 billion payment the company has made was deducted from its 20 percent share, with only a small proportion coming from driver incomes in October.
An official from the Ho Chi Minh City taxman said Uber Vietnam has refused to pay taxes for its drivers, blaming a loss of contact with those who quit driving for the service.
Uber Vietnam also questioned the city’s tax department on what would happen if the company deducts taxes from drivers in advance, but come tax time their total incomes are below the threshold to pay taxes.
A Ho Chi Minh City tax official commented that this argument is yet another excuse, as the general taxation department has stated clearly that in this scenario, the drivers will receive a tax refund rather than a loss of money.
“We have provided clear and detailed guidelines, but Uber has only fully paid taxes generated from their 20 percent share, and has yet to properly pay taxes on behalf of its drivers,” the Ho Chi Minh City taxman said.