The Ho Chi Minh City People’s Court has dismissed a suit by ride-hailing company Uber against the city tax department seeking remedy against a claim for back taxes, saying that the Netherlands based company “does not have the required legal status for such a case”. The decision by the HCMC court appears to be the final step for the city’s tax authorities to receive more than $2.35 million USD (53 billion VND) in back taxes and penalties that the city has demanded.
In September 2017, the HCMC tax authorities ordered Uber to pay $2.94 million USD (66 billion VND) in tax and penalties and stipulated that the deadline for payment was Dec. 23, 2017. However, the company claimed that under international tax regulations that it did not owe that amount and only paid $586,000 USD (13.3 billion VND).
After Uber refused to pay the other amounts, the tax authority ordered five local banks to appropriate $2.35 million USD (VND54 billion VND) from Uber’s accounts by January 10, 2018. Uber then filed a lawsuit against the tax department on December 29th and the tax department received a notice from the HCMC court to stop the appropriation from Uber’s banks. Now that the case has been dismissed, the tax authorities plan to move forward with collection.
In December 2017, the European Union court rejected Uber’s argument in a EU lawsuit that it is only a digital application that acts as an intermediary between drivers and passengers and the court ruled that Grab and Uber are transportation (taxi) companies and not technology companies. The EU court said that Grab and Uber’s operations in the EU should be regulated as taxi companies, their workers should receive regular employment benefits and that they should be monitored to ensure compliance.
After the EI court gave their opinion, Vietnam’s Minister of Transport, Nguyen Van The said, “We should learn from the EU to manage this service” and he urged government authorities to submit proposals to manage Uber and Grab along the lines of the EU decision.
In related news, the Ho Chi Minh City Taxi Association has proposed multiple times during 2016 and 2017 that the transportation ministry regulate Uber and Grab as regular taxi operators. The association has also requested that government authorities ban Uber and Grab from offering promotions that use foreign capital and then report losses to avoid paying taxes.
Vietnamese taxi companies, including Anh Duong Viet Nam Company (Vinasun) have sent document to the Ministry of Transport proposing that Grab and Uber be regulated as taxi operators and that their Vietnam operations be monitored so that they do not have “unfair” advantages over established taxi companies.