Grab will have to be responsible for paying Uber’s tax arrears according to a Vietnamese tax official.

Deputy head of the Inspection Department under the General Department of Taxation, Dang Duy Khanh told Dtinews on Wednesday that they will work with Grab about the debt of VND53.3 billion (USD2.33 million) in tax arrears that HCM City Taxation Department has been asking Uber to pay.

"We'll see the terms of the purchase contract between Uber and Grab, but Grab should be responsible for paying taxation while operating in Vietnam," Khanh noted.

"Grab will not only be asked to pay the tax arrears for Uber but also to report and pay tax on the purchase contract," Khanh said.

Although the deal was carried out outside Vietnam, Khanh is confident that they can get the tax of this purchase.

"We had successfully collected taxes from similar transfer cases including the transferring of Big C from French Casino Group to Thai Central Group in 2016," Duy said. "The Central Group paid the tax of 2 trillion (USD 88.14 million) at that time.

Earlier, speaking with the media on the sidelines of a regular government press conference in March, deputy minister of Finance, Vu Thi Mai stressed that after the merger, the new enterprise would take on all the tax responsibilities. 

The HCM City Taxation Department last year sent a notice to Uber that it had to pay VND66.68 billion (USD2.94 million) in tax arrears by December 23, but the company only paid VND13.3 billion (USD586,000).

Uber B.V. then filed a complaint against the General Department of Taxation and the Ministry of Finance on the grounds that it had fulfilled its tax obligations under a double taxation avoidance agreement signed between Vietnam and the Netherlands.

But the MoF said Uber B.V. was not entitled to a tax exemption under the agreement since it generates its income in Vietnam through a network of local partner drivers.

The tax department then asked five banks - Vietcombank, Eximbank, Sacombank, ACB, and VietinBank - to appropriate fares paid to Uber through bank accounts and send them instead to Uber International Holding B.V. The seizure would be done between January 1 and 10.

Uber then decided to take the department to court but the HCM City People’s Court blocked Uber B.V’s legal action.

Uber announced the sale of its Southeast Asian business to rival Singapore-based Grab on March 26 for a 27.5 percent stake.

Dtinews