Prime Minister Nguyen Tan Dung has instructed the Transport Ministry to work with Ho Chi Minh City authorities to determine Uber's legal status in Vietnam.

Uber launched its service in HCM City in July and has since signed contracts with 200 licensed transport firms. It started operating in Hanoi in October.

Transport officials said in early December that the company was not qualified to provide transport services because it failed to meet tax regulations.

Uber communications head for South Asia Karun Arya previously told local media that Uber did not operate any vehicles or drivers, but only helped build a bridge between passengers and licensed transport firms.

In an interview with online newspaper Vietnam Plus, Nguyen Quang Tien, Director of the Ministry of Finance's Department of Tax Reform and Modernisation, said tax officials recently met with a representative from Uber International Holding B.V. and determined the income source of Uber in Vietnam.

According to Tien, Uber said it generated income from new account and cancellation fees as well as trip costs. The account fee was returned to the customer once his or her credit card was approved, so it did not count toward Uber's revenue.

Tien said Uber was planning to transfer 80 percent of its revenue (trip costs) to local transport firms that it signed with and keep a 20 percent service fee.

According to Tien, Uber would soon release the names of transport firms that it had partnered with.

Uber also informed tax officials during the meeting that local transport firms should be responsible for fulfilling tax obligations, based on contracts signed with Uber.

According to Tien, Uber International Holding B.V. in the Netherlands would sign this and Uber Vietnam would only focus on supporting activities, marketing and training, which means that currently Uber Vietnam has not generated revenue.

Tien said tax authorities were working on two options for holding Uber accountable for paying taxes in Vietnam. The first option would be requiring Uber International Holding B.V., the mother company in the Netherlands, to pay 3 percent of value-added tax on revenue generated from the transport cost and 2 per cent of the business income tax since Uber International Holding B.V. still directly participates in Vietnam operations.

The second option would be requiring Uber to pay 5 percent of the value-added tax and business income tax based on its total revenue in Vietnam.

Regarding regulating the revenue of Uber as well as its partner transport firms, Tien said relevant agencies could track the company's activities and receipts stored in host computers in Vietnam and abroad to determine if there were tax violations.

VNA/VNN