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Could Uber Taxi’s Driver be treated as Dependant Agent?

Could Uber Taxi’s Driver be treated as Dependant Agent?

On our article, Taxing Uber Taxi in Indonesia, Uber server is located in America, and is easy for them to move the server anywhere they liked, and also they don’t have any vehicles and employee in Indonesia. So the question is, how Indonesia could impose a tax to Uber? There is no place of management, a branch, an office, a factory, a workshop, a farm or plantation, a warehouse, a mine, oil or gas well, a quarry, or other place of extraction of natural resources, a building site or construction or assembly or installation project, or supervisory activities in connection therewith, or an installation or drilling rig or ship used for the exploration or exploitation of natural resources, which exists or continues for more than 120 days and the furnishing of services, including consultancy services, through employees or other personnel engaged for such purposes, but only where activities of that nature continue (for the same or a connected project) for more than 120 days within any consecutive 12-month period, provided that a permanent establishment shall not exist in any taxable year in which such services are rendered in that State for a period or periods aggregating less than 30 days in that taxable year, as stated on Tax Treaty USA-Indonesia Article 5.2 about the term of permanent establishment. But,
Is there any possibility to treated Uber Taxi’s Driver as Dependant Agent, and treated as Permanent Establishment, so Indonesia could taxing Uber?

On article 5.4.a, Tax Treaty between USA and Indonesia stated :
A person acting in one of the Contracting States on behalf of a resident of the other Contracting State, other than an agent of an independent status to whom paragraph 5 applies, shall be deemed to be a permanent establishment in the first-mentioned Contracting State if such person : a) has and habitually exercises in the first-mentioned Contracting State, an authority to conclude contracts on behalf of that resident, unless the activities of such person are limited to those mentioned in paragraph 3 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions, of that paragraph.

Uber Taxi’s driver are just a person that provide their car as a taxi, they don’t know about who is behind Uber or who is controlled the server, they just take their personal car to pickup and get the client to the place as they wanted on application. The driver has an authority to take the client or not (as on Uber website), the question is, do they act as a person to conclude contracts on behalf of Uber?

Before answer the question, we have to know first how to be a Uber Taxi’s driver or they called it Partner. On their website, to become a Partner, people must fill the form, and there are Uber code of conduct that the partners must be followed :
• Profesionalism & Respect
Uber maintains a zero-tolerance policy regarding all forms of discrimination, harassment or abuse.

Non-discrimination
It is unacceptable to refuse to provide or accept services based on a person’s race, religion, national origin, disability, sexual orientation, sex, marital status, gender identity, age or any other characteristic protected under applicable federal or state law. This type of behavior can result in permanent loss of access to the Uber platform.

No aggressive behavior
It is disrespectful to make derogatory remarks about a person or group. Furthermore, commenting on appearance, asking overly personal questions and making unwanted physical contact are all inappropriate. We encourage you be mindful of other users’ privacy and personal space. Violence of any kind will not be tolerated.
Human Kindness
Calm and clear communication is the most effective way to defuse any disagreement that may arise between you and another Uber user. Uber expects that all riders and drivers will treat one another with respect and courtesy.

• Safety
The safety of riders and drivers on the Uber platform is of utmost concern. In order to best protect everyone in the vehicle, we require the following:

Compliance with the law
Illegal substances and open containers of alcohol are not permitted in drivers’ vehicles. This is against the law and a serious violation of Uber’s policy. Furthermore, Uber does not tolerate drug or alcohol by drivers while using the Uber app. If a rider believes a driver may be under the influence of drugs or alcohol, please request that the driver end the trip immediately and alert Uber Support at help.uber.com.

As a driver, it is your responsibility to transport riders safely in accordance with the rules of the road in your city. As a rider, it is your responsibility to abide by the seat belt laws in your state. However, we recommend that you always wear a seatbelt while riding in any vehicle.

Disabilities
Uber expects compliance with all state, federal and local laws governing the transportation of riders with disabilities. Violation of these laws, including with respect to the use of service animals, constitutes a breach of the parties’ licensing agreement. Service animals must be accommodated in compliance with accessibility laws. Reports of refusing to transport a rider with a service animal will lead to deactivation of the Uber account.

Following the rules
We require partners to keep documents up to date to remain active. Riders, likewise, must maintain active payment information.

Riders are responsible for guests traveling with them or anyone they request a ride for. It is your responsibility to ensure everyone adheres to Uber’s Code of Conduct.

Violations of this Code of Conduct could result in loss of your Uber Account. Please report any violations to Uber. We want to hear your feedback so please alert us and we’ll take action.

• Emergencies
If at any time you feel that you are faced with a situation that requires immediate emergency attention, please call the emergency service number in your area. Once all parties are safe and the situation has been handled by the authorities, please then notify Uber.
We will assist and take appropriate action as needed, including cooperating with law enforcement.
Beside that, there is statement that Uber will not withhold the tax of the drivers, all Uber partners are independent contractors, partners are entirely responsible for their own tax obligations.

Because of that, we could conclude that :
• There is no contract between Uber and Partners buat there are Code of Conduct that the Partners must be followed;
• Partners has an authority to take the client or not;
• Uber is treated Partner as a independent contractor, and the will not withhold the tax of partner income.
On my opinion, the Uber Taxi’s Driver just free agent for Uber that couldn’t be treated as Dependant Agent of Uber and also couldn’t be treated as permanent establishment, so Uber couldn’t be taxing in Indonesia.
Technology is developed rapidly that need to be concerned not only for business actor but also for government, specially for tax purpose. International transaction today is common, people could get easily to found anything by internet. Indonesia, or any other country, must take an action of international transaction using technology, because there are two jurisdiction of country if talking about international transaction. Tax treaty between the country must follow up by changing all over the time. Regarding on Uber cases, there must be a convention between Indonesia and USA, to change the tax treaty agreement for transaction using technology so Indonesia could taxes the Uber, and maybe also not only all other treaty partner to prevent the same transaction like Uber.

-THO-

tommyho123

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