Grab says not responsible for Uber’s tax in Vietnam after takeover

Grab says not responsible for Uber’s tax in Vietnam after takeover

An Uber driver (right) is seen next to a Grab driver in this photo taken in Ho Chi Minh City. Photo: Tuoi Tre

Uber must be responsible for any tax incurred during its selling of its operations in Vietnam and across Southeast Asia to Grab, the latter said on Wednesday.

Uber, which has transferred its operations in Southeast Asia to regional rival Grab in return for 27.5 percent of Grab’s shares, shut down its ride-booking application in Vietnam at 12:00 am on April 9.

The Ho Chi Minh City tax department has requested that Grab submit relevant documents of the deal, underlining that the transfer of Uber’s capital, business rights and market share in Vietnam to the Singapore-based firm is subject to corporate income tax as per Vietnamese laws.

According to the taxman, the acquiring party, in this case Grab, is responsible for tax declaration and payment.

A Grab representative told Tuoi Tre (Youth) newspaper on Wednesday it had submitted documents to the tax department as requested, adding that it would not bear any tax responsibility on behalf of Uber.

Grab has stressed in a letter sent to the taxman that it had studied its legal options with caution and thoroughness in consultation with legal experts to make sure the deal was carried out in accordance with the laws and regulations in all countries involved, including Vietnam.

“We confirm that Grab Vietnam did not acquire the legal status of [the Netherlands-based] Uber B.V. or Uber Vietnam,” the representative said.

“The deal was focused around taking over Uber Vietnam’s assets and contracts after the company exits the Vietnamese market.”

A ComfortDelgro taxi passes Uber and Grab offices in Singapore March 26, 2018. Photo: Reuters
A ComfortDelgro taxi passes Uber and Grab offices in Singapore March 26, 2018. Photo: Reuters

Grab stressed that any tax liability that may arise from the deal would be paid for by Uber pursuant to local laws.

“We understand that Uber B.V. and their consulting units are dealing with issues relating to their tax liabilities in Vietnam,” the representative said, refusing to further comment on the matter.

This is the second time Grab has made a public statement on tax liabilities concerning its deal with Uber, following similar comments on April 5.

Following its exit, Dutch-based Uber B.V. still owes VND53.3 billion (US$2.34 million) in outstanding tax in Vietnam.

It has sought legal actions against the Ho Chi Minh City Tax Department over the tax arrears demand, reasoning it had fulfilled its tax duties in the Netherlands, with which Vietnam had signed a treaty against double taxation.

Uber B.V. did not open a local bank account during its four years of operation in Vietnam, making it challenging for authorities to collect the overdue tax even if they win the case in court.

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