Taiwanese National Taxation Bureau Freezes Uber’s Assets
There are many alternative phrases to describe the sharing economy. One of them is the “collaborative” economy. Collaboration seems to be in very short supply, however, when it comes to the taxation of the companies and individuals involved.
It seems that the attitude of many tax authorities when confronted with new ways of doing business in the digital economy is to tax first and ask questions later. Indeed, in many cases, they just tax, and don’t bother with awkward questions.
Uber’s business model seems to be a particularly challenging one for traditional tax regimes. Uber insists that its drivers provide “ride-sourcing” services, rather than traditional “taxi” services. Many governments, on the other hand, beg to differ, which puts Uber drivers and the company itself in a very uncertain position with regards to tax and regulation.
It’s at this point I would like to single out Estonia as a shining example of how things can be done. Back in 2015, Estonia’s Tax and Customs Board (MTA) and Uber decided to establish a working group to discuss the best way forward on tax. It was an approach, said Enn Mestar, CEO of Uber Estonia, that marked the MTA out as “a far-sighted and innovative public authority.” Now that’s something you don’t hear very often!
Unfortunately, most tax authorities are still taking a confrontational, rather than a collaborative, attitude to the collaborative economy, like Taiwan, which recently went as far as freezing Uber’s assets in the country, in the latest step in a long-running tax dispute between the company and the Taiwan tax authority.
So perhaps “sharing economy” is the more accurate term to use after all. Because tax authorities are showing little inclination to collaborate with taxpayers, but they still want their share.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look