HANOI, Sept. 13 (Xinhua) -- Vietnam's Ministry of Finance (MoF) has recently issued a document on tax payment rules for Uber relating its car hailing service in the country.
According to the ministry, Uber must pay taxes as a foreign establishment, which operates and earns income in Vietnam without resident offices.
As such, the direct method will be applied on Uber, in which payable tax amount is based on revenue multiplied with tax rate, Vietnam's state-run news agency VNA quoted the ministry as saying on Tuesday.
The rates are three percent for value added tax (VAT) and two percent for corporate income tax (CIT) among the Uber's revenue generated in Vietnam, said the ministry.
In order to do so, the MoF asked Uber to authorize either its subsidiary Uber Vietnam Limited Company or a third party to declare and pay VAT and CIT.
Meanwhile, individuals who have signed contracts with Uber to provide the taxi service will pay tax on their earned income.
Uber collects all the transport fares through card payments. Uber drivers use their own vehicles and share 20 percent of their revenue with Uber, while the remaining 80 percent goes into their own pockets.
The rates for individual drivers are 3 percent for VAT and 1.5 percent for individual income tax, said VNA.
Uber entered Vietnam in June 2014. Since then, tax collection for the car hailing application-based service has remained controversial since this was the first service of its kind in the country, triggering worries about the efficiency in collecting taxes as well as the unfairness to other transport firms in Vietnam.
