HCM CITY - Uber Vietnam would have to pay taxes as people's court in HCM City dismissed a suit by the company against the city tax department.
The HCM City People’s Court has dismissed a suit by the Dutch-based ride-hailing company Uber International Services Holding B.V against the city tax department seeking remedy against a claim for back taxes.
VNExpress electronic newspaper reported the court said Uber Vietnam, a subsidiary of Uber International, “does not have the required legal status for such a case”.
In September, the department ordered Uber to pay VND66.68 billion (US$2.94 million) in tax arrears and penalties for tax evasion by December 23. But the company only paid up VNĐ13.3 billion ($586,000).
The department then asked five local banks to appropriate more than VND53.38 billion ($2.35 million) from Uber’s accounts by January 10.
Uber then filed the lawsuit against the department.
On December 29, the department received a notice from the court to put on hold its appropriation from Uber.
Now that the case has been dismissed, the tax authorities will proceed to collect the amount.
Minister of Transport Nguyen Van The said Vietnam should learn from the European Union (EU) to manage the operation of companies such as Uber and Grab to ensure fair competition for traditional taxi firms.
At a conference of the General Directorate for Road of Vietnam on Tuesday, The said the management of Uber and Grab remained controversial worldwide.
However, in December, the EU’s top court ruled that Uber should be classified as a transport service and regulated like other taxi operators despite Uber’s argument that it was simply a digital app acting as an intermediary between drivers and passengers.
“We should learn from the EU to manage this service,” The said, urging relevant management authorities to raise proposals to manage Uber and Grab following the established regulations and ensure a healthy competition environment.
HCM City Taxi Association recently proposed that the transport ministry regulate Uber and Grab as taxi operators.
The association also suggested that Uber and Grab be banned from using foreign capital sources to offer promotions aimed in getting a share of the taxi industry, and then reporting losses to avoid paying taxes.
In a related move, taxi firm Anh Duong Việt Nam Company (Vinasun) sent a document to the Ministry of Transport proposing that Grab and Uber should also be regulated as taxi operators.
Reuters reported that Uber has transformed the taxi industry since its launch in 2011 and currently operates in more than 600 cities globally.
The boom in Uber and Grab cars in major cities, including Hanoi and HCM City, during the past three years has pushed many taxi firms into difficulties.