Uber B.V. has completely cleared a whopping amount of tax arrears it owed prior to its Vietnam exit, in an about-face that brought down the curtain of a prolonged showdown between the ride-hailing company and local tax authorities.
In September 2017, the Netherlands-based company was asked by the Ho Chi Minh City tax department to clear VND66.68 billion (US$2.87 million) worth of unpaid taxes.
The hefty amount included VND10.3 billion ($442,900) worth of wrongly declared taxes, nearly VND51.48 billion ($2.21 million) worth of tax arrears and a fine of more than VND4.9 billion ($210,700) for late tax payment.
However, the ride-hailing firm had only agreed to clear VND13.3 billion ($585,903) of the total sum by the end of 2017, resulting in a tax row between it and local tax authorities that went on for a good nine months.
On Monday, Nguyen Nam Binh, deputy head of the Ho Chi Minh City tax department, told Tuoi Tre (Youth) newspaper that Uber had cleared the remaining VND53.3 billion ($2.29 million) worth of back taxes and fines.
Uber had repeatedly refused to clear the back taxes, and it is not clear what motivated this U-turn move from the company, which exited Vietnam in April after transferring its market share in Southeast Asia to rival Grab.
The tax arrears clearing has apparently put an end to the showdown between Uber and tax authorities.
Uber B.V. authorized Uber Vietnam to oversee its business in the Southeast Asian country.
Upon receiving the initial request to pay the VND66.68 billion ($2.87 million) taxes and fines, Uber B.V. filed a petition to the Ministry of Finance, reasoning that it had fulfilled its tax duties in the Netherlands in accordance with a treaty against double taxation signed between the European country and Vietnam.
The complaint was dismissed, with the finance ministry asking the company to pay the full amount as demanded by the Ho Chi Minh City taxman.
With Uber showing no signs of paying the taxes, the Ho Chi Minh City tax department gave it an ultimatum to pay the amount within ten days from December 12, 2017. Uber completed the VND13.3 billion payment by this deadline.
The tax department then had to enact a coercive measure -- calling on five local banks to freeze the accounts of the company from January 1 to 10, 2018.
The coercive measure was intended to be lifted only after the department received the remaining VND53.3 billion worth of taxes owed by Uber Vietnam.
Uber Vietnam then brought the issue to court, with the court eventually taking a ‘temporary urgent measure,’ preventing the tax department from enacting its coercive action.
However, in January, the Ho Chi Minh City People’s Court suspended the case, saying Uber Vietnam is not entitled by its Dutch parent firm to file a lawsuit or appear in court in Vietnam on its behalf.
By the end of March, the company had filed the second lawsuit against the municipal taxman, only to withdraw in August.