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By Jan Stojaspal
UBER B.V., Uber’s Dutch entity based in Amsterdam, signed July 12 an agreement with the Czech Ministry of Finance to ensure that its drivers pay the appropriate amount of tax.
Uber will provide Czech tax authorities with information on annual incomes of both self-employed drivers and companies providing transportation services via Uber’s mobile app, according to a news release from the finance ministry.
The agreement follows an April 30 memorandum that UBER B.V. signed with the Czech government and the City of Prague. The memorandum gave the company until the end of June to finalize an information-sharing deal with the government.
Starting in October, Uber will pilot an electronic sales reporting system meant to give the tax authorities access to information on any cash transactions in real time, or as near to real time as possible.
Uber also made several commitments related to value-added tax collection. It will ensure its drivers are informed about their obligation to register for value-added tax and to pay it on any service fees charged by Uber, which isn’t established as a taxable entity in the territory of the Czech Republic. It will also check that drivers have registered for VAT, and suspend drivers who fail to do so.
The signing of the agreement comes as efforts to tax the sharing economy intensify in Central Europe, and protests multiply from taxi drivers that Uber benefits from diferent rules. Uber currently has some 2,000 drivers in Prague, according to media reports.
The agreement means the tax authorities “will have information for correct collection of taxes from drivers,” and will be able to cross-check the information with specific tax returns, Tereza Tomanova, a tax manager specializing in international taxation at Deloitte Czech Republic, told Bloomberg Tax in a July 12 email.
The news release said the agreement is seen as an “exemplary demonstration of cooperation between the state and a representative of the shared digital economy.”
“I would like to make it clear that we support the shared digital economy, that we consider it a prospective business area whose importance is growing unstoppably,” Czech Minister of Finance Alena Schillerova, who signed the agreement, said in the release.
Still, the company must fit in with the existing legislative and administrative framework, she added. That way the shared digital economy will be accepted by “traditional businesses, in this case by regular taxi services, in particular, by local governments and everyone else that is in any way impacted by this phenomenon,” she said.
Alexei Stakh, Uber’s general manager for Central and Eastern Europe, also welcomed the agreement.
“We want to be a long-term partner of the Czech Republic, and we want to do things right,” he said in the news release.
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