Taiwan asks Uber to pay bill in sales tax stand-off

August 19, 2016 4:03 AM EDT

A taxi passes by an advertisement for the Uber car and ride-sharing service displayed on a bus stop in Paris, France, in this March 11, 2016 file photo. REUTERS/Charles Platiau/File Photo

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TAIPEI (Reuters) - Taiwan has asked Uber Technologies to pay a sales tax bill estimated by local media to be up to about $6.4 million, the government said on Friday, as a decision looms on whether the global ride-hailing service may be ordered to leave the island.

Taiwan's Investment Commission said earlier this month it may order Uber to exit the market, saying the company misrepresented its business as an internet-based technology platform rather than a transportation service. A decision is due by the end of August.

Uber has not previously been liable for sales tax since it set up shop in Taiwan in 2013. But the government is overhauling the tax regime it imposes on global online service providers, and says Uber owes back taxes.

"As long as they provide services in Taiwan, they have to pay sales taxes," said Wu Ting-yang, auditor of the National Taxation Bureau of Taipei.

Wu declined to disclose how much Uber might be billed for sales tax, but local media reports estimated the tax would be up to T$200 million ($6.4 million).

The company rejected the claim it owes sales taxes.

"Uber is meeting all of its tax obligations under relevant local laws," the firm said in an emailed response to Reuters' questions.

The firm said it had taken part in discussions hosted by the National Taxation Bureau on Thursday "to discuss potential tax reform for cross-border digital services".

(Reporting by Faith Hung; Editing by Kenneth Maxwell)

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