Monday, 22 August 2016

Uber facing massive $6.3 million bill in back taxes in Taiwan

It's tough times for Uber in Taiwan, as the company possibly faces a massive $6.3 million tax bill there.

The government has reportedly asked the U.S. ride-sharing firm to pay up in back taxes owed since it entered the market in 2013, reports Reuters.

SEE ALSO: Uber drivers are under criminal investigation in Finland

Uber had not previously been liable for the tax, but regulators have reworked the tax structure for foreign online businesses, and now say Uber is on the hook.

According to local reports, the finance ministry met with foreign companies like Uber, Apple and Agoda last Thursday to brief them on the new tax framework. Ministry officials said there is a 5 percent sales tax required of ecommerce businesses.

The government didn't specify exactly how much Uber is liable for, but Taiwan media estimate it could hit T$200 million ($6.3 million) based on Uber's operations in the past four years.

The Taipei City Professional Drivers' Union estimates that Uber drivers have given some 10 million rides in Taiwan since it entered the market.

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 Uber in operation in Taipei.
Uber in operation in Taipei.
IMAGE: UDNDATA/IMAGINECHINA
2016%2f06%2f29%2fed%2fhttpi.amz.mshcdn.comvxiwje8xw85_6r8_ryssmawj6kg250x.16b59
BY VICTORIA HO
SINGAPORE
1 HOUR AGO
It's tough times for Uber in Taiwan, as the company possibly faces a massive $6.3 million tax bill there.

The government has reportedly asked the U.S. ride-sharing firm to pay up in back taxes owed since it entered the market in 2013, reports Reuters.

SEE ALSO: Uber drivers are under criminal investigation in Finland

Uber had not previously been liable for the tax, but regulators have reworked the tax structure for foreign online businesses, and now say Uber is on the hook.

According to local reports, the finance ministry met with foreign companies like Uber, Apple and Agoda last Thursday to brief them on the new tax framework. Ministry officials said there is a 5 percent sales tax required of ecommerce businesses.

The government didn't specify exactly how much Uber is liable for, but Taiwan media estimate it could hit T$200 million ($6.3 million) based on Uber's operations in the past four years.

The Taipei City Professional Drivers' Union estimates that Uber drivers have given some 10 million rides in Taiwan since it entered the market.

 Taipei City Professional Drivers' Union officials hold placards, reading 'Uber Doesn't pay Tax', outside the prosecutor's office after filing a law suit case against Uber for tax evasion in Taipei, Taiwan, 19 August 2016.
Taipei City Professional Drivers' Union officials hold placards, reading 'Uber Doesn't pay Tax', outside the prosecutor's office after filing a law suit case against Uber for tax evasion in Taipei, Taiwan, 19 August 2016.
IMAGE: RITCHIE B. TONGO/EPA
Uber had told Reuters in response that it doesn't owe outstanding taxes, saying: "Uber is meeting all of its tax obligations under relevant local laws."

Uber might get kicked out of Taiwan entirely
The tax controversy only adds to Uber's woes in Taiwan, which is currently mulling a decision to ask Uber to exit the market at the end of August.

Taiwan's Investment Commission said at the start of the month that the company misrepresented its business as an internet-based technology service, and not a transportation company.

"They are registered as an information services provider, but what they're doing is actually transportation," commented Lin Kuo-hsien, a ministry spokesman, in an AFP report.

Uber has been battling regulators for the most part of this year, after being outlawed in February by a Taiwan high court.

Despite operating under less than legal terms, Uber drivers in Taiwan have still continued working, although they've had to suspend operations sporadically as police stepped up efforts to clamp down on them.

Local taxi unions have also been lobbying hard for the government to stop Uber and other ride-sharing firms.

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