Tax industry affirms that Uber taxi management plan is feasible

The tax management plan for Uber taxis has been specifically calculated by the authorities and assessed as completely feasible in the near future.

Illustration photo: Reuters

Transport businesses "hug" taxes for Uber

Responding to reporters this morning (December 18), Mr. Nguyen Quang Tien, Director, Deputy Head of the Reform and Modernization Department, General Department of Taxation, affirmed that the tax sector had a specific working session with representatives of Uber International Holding BV recently and determined the income generated by this unit in Vietnam.

As a result, Uber currently has 3 sources of income: Account registration fee, trip cancellation fee and actual payment fee from customers via Visa Card, MasterCard, AMEX payment cards. Accordingly, Uber will transfer 80% of the fare to the transport company and receive a 20% service fee.

However, according to Mr. Tien, Uber explained that the 5,000 VND account opening fee is actually the side that verifies the validity of the credit card. This fee will then be refunded to the customer after their credit card is confirmed to be valid. Therefore, Uber believes that this fee is not considered as income of Uber International Holding BV in Vietnam.

Regarding the actual payment fee, the tax representative cited the explanation of the representative of Uber company in Vietnam, saying that in the signed contract, Vietnamese transport enterprises will be responsible for declaring and paying taxes arising in Vietnam on behalf of Uber.

According to Mr. Tien, this also means that although Vietnamese transport companies receive 80% of the money collected from customers, they will have to pay the contractor tax to Uber. On the contrary, Uber will retain the 20% service fee. However, according to Mr. Tien, this is a matter of profit sharing between the parties and is clearly stated in the contract.

Mr. Tien also said that in fact, Uber International Holding BV in the Netherlands is the company that directly signs contracts with Vietnamese transport companies. Uber Vietnam Limited Company only carries out supporting and marketing activities to expand the market network, support training, etc.

All activities of collecting money from customers to pay for transportation businesses are carried out by Uber International Holding BV, so Uber Vietnam is not obliged to declare and pay contractor tax to the company in the Netherlands.

Therefore, this tax representative said that, up to this point, Uber Vietnam Limited Liability Company has not generated any revenue in Vietnam. However, according to him, this issue has not been specifically verified because Uber Vietnam has not yet reached the tax declaration period (the company was granted a registration certificate since October 14, 2014).

Ho Chi Minh City Taxi Association believes that Uber taxi service is unfairly competing. Illustrative photo: VNA

Ask Uber to provide customer list

Regarding determining the rate of value added tax and corporate income tax for Uber International Holding BV, the representative of the General Department of Taxation said that this unit has 2 handling options.

Specifically,Option 1Mr. Tien said that he would calculate value added tax on revenue with Uber in the form of transportation business and at the rate of 3%. Corporate income tax on revenue with the corresponding industry is 2%. This plan, according to him, is based on the fact that Uber International Holding BV Company has directly participated in operating passenger transportation activities.

Option 2proposed by the tax industry is to calculate value added tax and corporate income tax at 5% of total revenue. This is the tax rate for service activities. According to Mr. Tien, Uber's side gave the opinion that this company only provides technology solutions connecting passengers with transportation companies and is an intermediary providing payment services and information technology services.

Regarding the above two options, the leader of the General Department of Taxation affirmed that relevant competent authorities such as the Ministry of Transport, the Ministry of Industry and Trade, and the Ministry of Information and Communications have not yet made an official written conclusion on Uber's business form.

Speaking more about the management of revenue of transport units as well as Uber, the representative of the General Department of Taxation affirmed that data and payment documents are stored simultaneously on foreign servers and in Vietnam. Therefore, according to Mr. Tien, the authorities have the basis to compare and verify when necessary and tax management is feasible.

However, he also frankly stated that in order to manage well, Uber must regularly provide its customer list to the tax department. This is an issue that Mr. Tien affirmed, the tax department has worked with Uber and the company representative committed to fully implementing.

According to Vietnam+