VietNamNet Bridge – Regarding information that Uber Vietnam transfers VND1 billion (nearly $50,000) daily to the Netherlands, Uber Vietnam Director Dang Viet Dung said that most of the profits were transferred to transport partners and drivers in Vietnam.

Dung told Zing news that Uber adheres to the tax rules and fully pays taxes in all markets where it is present.

"Our transport partners and drivers in Vietnam act as providers of transport services in the journey. Uber technology plays the role of the service provider of connectivity and payment processing to transport partners such as freight collection and remittance services," Dung said.

Dung explained that partners will receive 100% of revenues from transport services trips they made with the Uber app. This is the income of transport partners.

Transport partners are responsible to pay Uber 20% of the cost for technology providing services to help connect transport service providers and passengers. This service cost is part of business cost of transport partners.

He also said that the majority of profits are transferred to partners in Vietnam, who use Uber technology for business.

"Unlike the traditional transportation industry with revenues mainly from cash, and the cash flow is not transparent enough, our technology ensures that any information from customers, trips, revenues is stored electronically, transparently and easy to monitor. As a result, tax collection is easy, convenient and fairer than the traditional transport sector," Dung said.

However, according to a survey made by Zing.vn, many drivers who are partners of Uber did not know how they pay taxes for Uber.

Driver Bui Van Hung (Hanoi), who has been partnered with Uber for nearly 1 year, said that according to regulations, each driver will have to pay 20% of the charges/trip to Uber as the technology service providing cost.

Depending on the choice of the driver, the cost will be paid via bank card or direct payment. "For example, if we collect VND100,000 of charges from a passenger, we have to pay VND20,000 to Uber. The amount will automatically be deducted on account of the driver or the driver pays it directly to the Uber representative office. We don’t know where the money moves to," said Hung.

Six questions of the Hanoi Taxi Association

Do Quoc Binh, Chairman of the Hanoi Taxi Association, said the key problem is that Uber has only a representative office, not a Uber Vietnam Company. Therefore, the clarification of expenses, revenues and VAT payment is a big question for the parties concerned.

The leader of the Hanoi Taxi Association posed 6 questions: it is legal or illegal for Uber to operate in Vietnam? If it is legal, where does the amount of 20% of charges that partners have to pay for the cost of technology services go? What is their obligation to pay taxes? Is it legal for any car to provide transport service?

Also, when Uber collects money from its transport partners, does it issue a VAT invoice? And if it does, who writes the invoice as Uber has only a representative office, not a company in Vietnam?

Binh pointed out that many companies linked to e-commerce in the world have ways to dodge the law. Typically, they will establish a representative office, not a company, in Vietnam. Then they will sign directly with a company in another country where the taxes are low, such as the Netherlands. By this trick they have to pay tax rates of only 0.5-1% instead of 10-11%.

Some countries do not accept this. They have asked for the establishment of companies, not representative offices.

Na Son