Vietnam Likely To Be Loser In Debt Claim Battle With Uber

Uber has left Vietnam

In 2017, the HCMC Taxation Agency released a decision on collecting arrears and imposing fines on Uber, totalling VND66.68 billion.

Of this amount, VND13 billion has been paid by Uber. The ride-hailing app refused to pay the remaining VND53.3 billion, arguing that it had the responsibility of withholding tax from drivers since August 24, 2016, the day the Ministry of Finance released  Dispatch No 11828.

Uber asserted that the legal document must not be retroactive.

Uber B.V, the holding company in the Netherlands, sued the HCMC Taxation Agency in the HCMC Court. However, while the lawsuit was still pending, Uber sold its Vietnam Business to Grab.

Vietnamese agencies said that Grab, as the new owner of Uber, will inherit all Uber’s rights and obligations, and will have to pay debts.

Meanwhile, a representative of Grab has said that it doesn’t have the obligation of paying the tax Uber owes to the HCMC Taxation agency.

The representative said that Grab doesn’t buy the legal status of Uber in Vietnam, which means that Uber must bear all legal responsibility for settling tax issues with the taxation authorities.

The HCMC Taxation Agency, when asked to comment about Grab’s statement, said the agency is still awaiting a report from Grab and has not made decision.

Lawyer Tran Xoa from the Minh Dang Quang Law Firm said if Uber had registered its legal status in Vietnam, Grab would have inherited all the rights and obligations of Uber when taking over Uber.

However, Uber did not have legal status in Vietnam. This means that there is no legal regulation for this case, because the design of legal documents cannot catch up with the practice.

The amount of money Uber still owes is the tax that drivers, or Uber’s partners, have to pay.

“State management agencies had to spend one year to discuss before deciding to collect tax arrears from Uber. Now, as Uber has left, it would be even more difficult to collect debts from it,” Xoa said.

Sharing the same view, Lawyer Truong Thanh Duc also thinks Vietnam may fail to collect debts from Uber if referring to current regulations.

It would be nearly impossible to coerce Uber, which has no representative in Vietnam, to pay tax. However, Duc said the taxation agency needs to thoroughly analyze Grab and Uber’s transfer contract to find solutions.

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Chi Mai