Ministry of Finance proposes to strengthen tax management with Uber, Grab
The Ministry of Finance has asked the Ministry of Transport to review the nature of Uber and Grab as transport businesses and to strengthen tax management.
The Ministry of Finance has just sent a document to the Government Office on the results of the 2-year pilot implementation of applying science and technology in supporting passenger transport connections under contracts (abbreviated as the Uber, Grab pilot) of the Ministry of Transport (MOT).
According to the Ministry of Finance, the application of science and technology in supporting passenger transport connections has created significant changes to the passenger transport business. However, besides the advantages, this also causes many difficulties for state management agencies, including tax agencies.
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The Ministry of Finance believes that the two-year summary report of the Ministry of Transport still lacks many contents related to tax management, such as determining the nature of passenger transport connections. In addition, difficulties in coordination between transport management agencies, business registration agencies and tax agencies have not been fully reflected, and there are no recommendations on tax management.
In its comments to the Ministry of Transport, the Ministry of Finance proposed to supplement and clarify the nature of the business forms of Uber and Grab. According to the Ministry of Finance, Uber and Grab are not registered for transportation business but are essentially transportation services. The Ministry of Finance suggested that the Ministry of Transport refer to the judgment of the European Court of Justice (ECJ) of the European Union (EU) on December 20, 2017, when it ruled that Uber is a regular transportation company, instead of a technology application.
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The Ministry of Transport must research to have regulations for this type, in order to manage closely and appropriately in the process of implementing the 4.0 industrial revolution, promoting development to better serve people.
The difficulties in tax management in recent times must also be promptly supplemented. The Ministry of Finance also proposed to supplement the Prime Minister's recommendations to direct the People's Committees of provinces to urge business registration, manage transportation services, and coordinate with tax authorities to manage taxes.
Previously, the Government Office had consulted the Ministries of Industry and Trade, Public Security, Justice, Information and Communications, Finance and Hanoi People's Committee on the 2-year implementation of the Uber and Grab pilot project.
The Ministry of Public Security has also proposed not to extend the pilot period. The Hanoi People's Committee and the Ministry of Information and Communications have agreed to extend the pilot period until the new Road Traffic Law and related regulations are issued. However, the Ministry of Information and Communications emphasized that in the meantime, the Ministry of Transport needs to have regulations on the next pilot period and consider developing some temporary regulations to limit some shortcomings./.