Uber has been ordered to pay taxes in Vietnam. Photo: independent.co.uk
Vietnam’s Ministry of Finance has issued new rules ordering the Netherlands-based ride-hailing service provider Uber
, which has been accused of providing transport services in Vietnam without paying taxes for two years, to declare and pay taxes, after lengthy legal discussions.
The new regulations set a value added tax rate of 3% on Uber International Services Holding B.V.’s revenue and a 2% corporate income tax rate.
On behalf of Vietnamese drivers, Uber is also required to pay a 3% value added tax and a 1.5% personal income tax.
As Uber B.V. is based in the Netherlands, Uber Vietnam or another authorized organization will declare and fulfill its tax obligations instead, said the ministry.
Uber Vietnam said in a statement filed on its website that it welcomed new steps to increase the tax transparency in Vietnam and affirmed its commitment to complying with them.
Vietnamese transport authorities have estimated that Uber Vietnam could earn revenue of 30 billion dong ($1.34 million) per month from the 20% commission that Uber drivers have to pay for each ride.
Meanwhile, Uber drivers can earn a monthly income of tens of millions dong and most of them do not pay any taxes for their service, Deputy Transport Minister Nguyen Hong Truong told local media.
In Vietnam, a personal income tax is imposed on those earning more than 9.6 million dong ($430) a month.
In contrast to Uber, Malaysia-based Grab Taxi
has been permitted to run a hailing app in major Vietnamese cities using both traditional taxis and unmarked minicabs. Grab drivers are paying a 4.5% income tax on their revenues.