What are methods of calculating taxi fares in Vietnam from January 1, 2025? Do Grab drivers need to pay taxes in Vietnam?

What are methods of calculating taxi fares in Vietnam from January 1, 2025?

Based on Clauses 3, 4, and 5, Article 6 of Decree 158/2024/ND-CP (document effective from January 1, 2025) regarding methods of calculating taxi fares as follows:

(1) Method of calculating taxi fares for a trip using a taximeter

- The vehicle must be equipped with a taximeter verified and sealed by a competent measurement authority, and must have a device to issue receipts or payment slips connected to the taximeter in the vehicle; both the taximeter and the printing device must be fixed in a position easily visible to passengers; the driver must issue an electronic invoice to the passenger at the end of the journey;

- The receipt must contain at least the following information: name of the transport business unit, vehicle registration number, trip distance (km), and the total amount payable by the passenger.

(2) Method of calculating taxi fares for a trip using software that directly connects with passengers through electronic means for booking, canceling rides, and calculating trip fares (hereinafter referred to as fare calculation software)

- The vehicle must have a device that directly connects with passengers for booking, canceling rides;

- The trip fare is calculated based on the distance determined on the digital map;

- The fare calculation software must comply with legal regulations on electronic transactions; the interface for passengers must include the name or logo of the transport business unit and must provide passengers, prior to the transportation, with the essential contents including: name of the transport business unit, name of the driver, vehicle registration number, itinerary, trip distance (km), total amount payable by the passenger, and a contact number for passenger feedback resolution.

(3) Method of calculating taxi fares for a trip as agreed with the transport business unit

The trip fare is agreed upon between the passenger and the transport business unit according to the listed rates on the taxi or through the fare calculation software of the passenger transport business unit by taxi.

What are methods of calculating taxi fares in Vietnam from January 1, 2025? Do Grab drivers need to pay taxes in Vietnam? (Image from Internet)

Do Grab drivers need to pay taxes in Vietnam?

Based on Section 1 of Official Dispatch 384/TCT-TNCN of 2017 from the General Department of Taxation, guiding the tax policy for business cooperation activities of Grab Taxi Company, the determination of tax obligations for individuals driving in cooperation with Grab Taxi is guided as follows:

Regarding tax obligations

...

1.3. For individuals doing business in the form of transportation business cooperation

1.3.1. Determining the tax obligation to be paid

- Individuals doing transport business signing business cooperation contracts with Grab Taxi Company or transport business organizations pay value-added tax (VAT) and personal income tax (PIT) at a percentage on revenue according to the contract as stipulated at Point b Clause 2 Article 2 Circular No. 92/2015/TT-BTC dated June 15, 2015, of the Ministry of Finance, specifically:

+ The percentage for calculating VAT on VAT taxable revenue is 3%

+ The percentage for calculating PIT on PIT taxable revenue is 1.5%

+ For incentive bonuses based on daily revenue: no VAT is calculated, individuals pay PIT at a rate of 1% on the bonus

- For service quality assessment bonuses: PIT is calculated at 10% on bonuses from 2 million VND per occurrence and above.

1.3.2. Regarding tax declaration and payment

- Grab Taxi Company is responsible for declaring and paying taxes on behalf of individuals according to the revenue and income shared under the business cooperation contract.

- Transport business organizations are responsible for declaring and paying taxes on behalf of individuals according to the revenue and income shared under the business cooperation contract.

Thus, Grab drivers (individuals doing transport business signing business cooperation contracts with Grab Taxi Company) are obliged to pay personal income tax and value-added tax calculated at the following percentages:

+ The percentage for calculating VAT on VAT-taxable revenue is 3%

+ The percentage for calculating PIT on PIT-taxable revenue is 1.5%

+ For incentive bonuses based on daily revenue: no VAT is calculated, individuals pay PIT at a rate of 1% on the bonus

+ For service quality assessment bonuses: PIT is calculated at 10% on bonuses from 2 million VND per occurrence and above.

What are the principles of tax calculation for individual businesses according to current regulations in Vietnam?

Based on Article 4 of Circular 40/2021/TT-BTC, the principles of tax calculation for individual businesses according to current regulations are as follows:

- Principles of tax calculation for individual businesses are implemented according to current legal regulations on value-added tax, personal income tax, and relevant legal documents.

- Individual businesses with a revenue from production and business activities in a calendar year of 100 million VND or less are not required to pay VAT and PIT according to tax law regulations on VAT and PIT. Individual businesses are responsible for accurately, honestly, and fully declaring taxes and submitting tax documents on time; being responsible before the law for the accuracy, honesty, and completeness of the tax documents as required.

- Individual businesses operating in the form of a group of individuals or households, with a revenue of 100 million VND/year or less to determine that individuals are not required to pay VAT and PIT, is determined for a single representative of the group of individuals or households during the tax year.

Note: From January 1, 2026, revenue from production and business activities in a calendar year of individual businesses from 200 million VND/year or less will be exempt from VAT and PIT.