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Ministries argue about gov't oversight of Uber

VietNamNet Bridge - Management agencies are continuing to argue about how to collect taxes from Uber. 
VietNamNet Bridge - Management agencies are continuing to argue about how to collect taxes from Uber. 

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There are two different viewpoints about Uber’s business.

First, Uber should be seen as a transport service provider because Uber determines the service fee and issues invoices to customers. It only hires institutions or individuals as partners to provide transport service. Only after collecting 100 percent of service fee will Uber periodically pay to its partners.

Second, Uber should be seen as an information technology (IT) firm providing a service to support transport activities. Uber does not sign contracts with drivers, but it only provides technological solutions based on mobile device platforms.

Uber must not be considered as a transport firm because it cannot satisfy requirements to be licensed if referring to the Transport Law.

Management agencies are continuing to argue about how to collect taxes from Uber. 
The HCMC People’s Committee, HCMC Taxation Agency and some other agencies believe that Uber must be a transport firm, while the Ministries of Planning and Investment, Industry and Trade, Transport, Information & Communication, VCCI believe Uber must be an IT firm.

According to Nguyen Quang Tien, a senior official of the General Department of Taxation (GDT), institutions and individuals in Vietnam are responsible for providing transport service and get the profit share ratio of 80 percent, while Uber gets 20 percent. The revenue the Vietnamese side receives accounts for a large proportion, therefore, it is unreasonable to list Uber as a transport service provider.

Those who support the viewpoint that Uber is a transport firm said that under the current laws, the side which receives money must take the responsibility of declaring and paying tax.

To date, Uber Vietnam has only made tax declaration for the income from the management fee Uber Netherlands paid to it and personal income tax. Meanwhile, Uber Netherlands has not declared tax. This means that taxation agency still cannot collect the corporate income tax on Uber’s business. 

Meanwhile, those, who support the second viewpoint, said since Uber only provides technology solution, it will only have to pay tax based on the 20 percent of the revenue it can receive.

According to Tien, Uber Netherlands has authorized PWC to act as the agent which makes tax declaration and pays tax for Uber in Vietnam. 

However, some analysts pointed out that the taxation body can only collect tax from the businesses and transport cooperatives, while it fails to collect tax from the individuals who do not make business registration. They believe that the tax sum GDT fail to collect from the subjects is relatively big. 

Tien emphasized that if individuals provide service while they don’t meet the requirements, they will be accused of doing business illegally.


Tran Thuy

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