– The case Uber and DAGTVA –

With regard to « UBER » type commercial transactions normally subject to indirect taxation on the price of the taxi service paid by the customer of the VTC.

These transactions are two in number:

1) Transaction C²B * regarding the payment of the taxi service paid to UBER by the VTC customer.
2) Transaction B²C * regarding the payment of the taxi service paid by UBER to the driver of the VTC.

(* Reminder of the terminology used in DAGTVA)

Transaction N ° 1 C²B * – Payment of the taxi service by the client to Uber.
View the payment slideshow of the taxi service to Uber.

As you will see, the payment of the taxi service is charged in the country of consumption of the customer corresponding to his bank details registered at Uber. This is in line with the directives of the European Commission and the OECD that the tax on payment should be collected at the place of consumption.

Example: The German customer of a VTC Uber, traveling in France, will pay Uber from his bank account declared in Germany, the VAT on the taxi service will be invoiced and deducted automatically on the payment, in France, in favor of the French Public Treasury, the value of the taxi service always corresponds to the budget of this German.

Uber will be paid by the German bank of the customer amount NET and VAT will be accounted for and credited in France. the Output Tax (the tax to be collected) will never return to the UBER world, next to the seller or service provider.

It is clear for tourists, with the DAGTVA tax system that the value of the tax always applies, for a buyer, in an environment related to the original economic possibilities and the place of its consumption and that can be abroad.

Transaction N ° 2 B2C * – Payment of the race by UBER to the VTC.
View the VTC payment slideshow by UBER.

Uber will pay the included VTC Tax, less its management fees. Uber Bank will collect the Tax on this payment and pay the VTC NET amount.

In the VAT environment, the Tax will be refunded to Uber, after payment NET amount of the VTC. The tax levied upstream in the procedure will be totally neutral. We then see that there is no double tax penalty on this second B²C transaction. The consumption tax is levied very simply on the first transaction C²B.

If for some reason Uber did not pay for its VTC, the tax would already be in the treasury of the country where the VTC customer is consuming.

If Uber is in a country with a GST / TPS environment, this fee will not be refunded. Uber will probably have to charge the tax to the VTC which will be paid NET amount with the charge of this tax in addition on this NET!

This is where the VAT system is superior to the GST / TPS system. It is this difference in tax treatment that can make Uber’s business model disappear in the GST / TPS environment becoming more expensive for the VTC than the current environment where regular taxis collect VAT.

Uber is in the GST / TPS environment, so it will be in his best interest to move his headquarters and banking environment to the world of a totally neutral VAT, for taxable persons, with DAGTVA.

The same conclusions can be observed with DAGTVA in the judgment of the European Court of Justice on the « Skandia » case.