HANOI: During an online discussion about how to deal with new business models held by Vietnamnet News on February 20, Nguyen Quang Tien, director of the General Department of the Taxation’s Department of Tax Reform and Modernisation, said Uber had paid VND10bn (USD438,000) of VAT and corporate income tax. According to the Ministry of Transport, it’s still unclear whether to classify Uber as a transport operation or transportation technology.
However, Tien said as a management agency, they must make decisions and Uber generated revenue in Vietnam so they must pay taxes. Tien raised the examples of individuals that had earned huge profits with the Bitcoin or Google search service providers in Vietnam that pose legal challenges to the taxation department as such cases haven’t been regulated by the law. But most of them voluntarily paid taxes.
Le Hoang Minh, vice head of HCM City Department of Transport said there were about 4,000 Uber taxis in Vietnam and VND1bn (USD43,800) profits sent to Netherlands each day. After that, the profits are divided and sent to Vietnamese partners. This is different than the contracts which state that Vietnamese partners keep 80% of the profit. Last year the Ministry of Finance has issued a new tax plan for Uber taxi service after its previous rule requiring drivers to pay tax on behalf of the company proved unpopular.
Uber will have to pay a total tax of 5%, including a 3% value-added tax and a 2% corporate income tax, on revenue generated from rides offered in Vietnam. Meanwhile, those transport companies and drivers under contract with Uber will have to pay 3% value-added tax and 1.5% income tax. Dutch-based Uber B.V is also required to authorise its subsidiary in Vietnam or a third party to declare and pay those taxes.
