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Uber Exits Vietnam, Leaves $2.3m in Tax Debt That Grab Refuses to Pay

Last Sunday, Uber officially ceased operations in Southeast Asia, allegedly leaving behind in Vietnam US$2.3 million (VND53 billion) in tax debt.

In a statement to the Ministry of Finance regarding Uber’s tax liability situation – a debt of US$2.3 million to the HCMC Tax Department – Grab confirmed that the company will not be responsible for any tax debt owed by Uber in Vietnam, reports Lao Dong.

“This matter is Uber's responsibility. Grab did not buy Uber's legal status in Vietnam, which is the unit bearing all legal responsibilities for settling tax-related issues with the tax department,” a Grab representative told VnExpress.

However, Grab’s statement wouldn’t hold true without proper documents outlining Grab and Uber’s role after the merger. Deputy Minister of Finance Vu Thi Mai said: “Grab has to be liable for this debt after the acquisition because it's the merged enterprise's responsibility to take over the legal liability of the merging enterprise that no longer exists.”

This view is also shared by Nguyen Nam Binh, Deputy of the HCMC Tax Department. In an interview with Zing, Binh also added, “In the case of this Grab-Uber deal, we will also have to look into their contracts’ terms and conditions. It will determine which party is responsible for paying the back taxes.”

The tax department has requested Grab submit a report regarding this matter; however, the department hasn’t heard back from the company at the time of writing.

In September 2017, the Ho Chi Minh Tax Department required Uber Vietnam to pay US$2.91 million in back taxes and tax evasion penalties. Uber paid off approximately US$600,000 but refused to pay the rest, claiming that it should not be subjected to such charges, citing the double tax avoidance agreement between Vietnam and the Netherlands. This means that Uber will only be subjected to tax in the company's native country and exempt from tax laws in Vietnam.  

Grab also found themselves in hot water recently when the company failed to prove the merger is not violating Vietnam’s Competition Law, which states that "if the parties to a merger have a combined market share in a relevant market from 30% to up to 50% then the parties must notify the Vietnam Competition Authority of the enterprise acquisition before completing the merger".

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