Library of Congress

Law Library of Congress

The Library of Congress > Law Library > News & Events > Global Legal Monitor

Vietnam: Document on Taxation of Uber Services Issued

(Sept. 19, 2016) Vietnam’s Ministry of Finance recently issued a document detailing the tax rules applicable to the car hailing services of Netherlands-based Uber International Holdings B.V. in Vietnam. According to the Ministry, as a foreign establishment without residence offices in the country, Uber is subject to the direct method of tax payment, whereby the tax payable is based on revenue times the tax rate; the rates are 3% for value-added tax (VAT) and 2% for corporate income tax. Uber must authorize either its subsidiary Uber Vietnam Ltd. or a third party to declare and pay these taxes. (Vietnam Announces Tax Rules for Uber, General Department of Taxation, Ministry of Finance website (Sept. 15, 2016).)

Uber drivers, “individuals who have signed contracts with Uber to provide the taxi service” and who share 20% of the revenue with the company, are responsible for paying the tax on the remaining 80% of their earned income, at the rates of 3% for VAT and 1.5% for individual income tax. (Id.)  However, the drivers will not directly pay their taxes to the tax administration; instead, the organization that Uber B.V. has authorized to declare and pay its taxes will represent the drivers for purposes of declaration and payment of their taxes. (Id.)

Collection of tax from Uber has been controversial ever since the ride-sharing application service company began operations in Vietnam in June 2014. The Ministry stated that Uber’s presence has triggered concern not only about collecting taxes from the company efficiently but also about the service model being unfair to Vietnam’s other transport firms.  (Id.)