Which vehicle operators are responsible for implementation of the regulation of a 4-hour driving session in Vietnam? Is the fixed-route passenger transport activity subject to VAT in Vietnam?
Which vehicle operators are responsible for implementation of the regulation of a 4-hour driving session in Vietnam?
Based on Article 64 of the 2024 Road Traffic Safety and Order Law, it is stipulated:
Working hours of vehicle operators of commercial transport vehicles and internal transport
- The driving time of car vehicle operators must not exceed 10 hours in a day and not exceed 48 hours in a week; continuous driving must not exceed 4 hours and must ensure compliance with related provisions of the Labor Code.
2. Commercial transport businesses, internal transport operations, and vehicle operators of commercial and internal transport vehicles are responsible for implementing the regulations in this Article.
Thus, the regulation requiring a 4-hour driving session only applies to vehicle operators of commercial and internal transport vehicles. It does not apply to car vehicle operators not belonging to the above categories.
How many types of motor vehicle engaging in transportation service are there in Vietnam in 2025?
According to Clause 6, Article 56 of the 2024 Road Law, the motor vehicles engaging in transportation service are stipulated as follows:
(1) Fixed-route passenger transport business;
(2) Public bus passenger transport business;
(3) Taxi passenger transport business;
(4) Contract-based passenger transport business;
(5) New types of passenger transport business according to the Government of Vietnam's regulations.
Whereby:
(1) Fixed-route passenger transport business involves using cars with a seating capacity of 08 or more passengers (excluding the driver's seat) for passenger transport, with designated departure and destination bus stations, and fixed schedules and routes.
(2) Public bus passenger transport business uses cars with a seating capacity of 08 or more passengers (excluding the driver's seat) for passenger transport, with designated start and end points, and bus stop points for picking up and dropping off passengers, with fixed schedules and routes; including intra-provincial and inter-provincial bus routes. To be specific:
- Intra-provincial bus routes operate within the territory of a province or centrally-governed city;
- Inter-provincial bus routes operate within the territories of 02 or more provinces or centrally-governed cities.
(3) Taxi passenger transport business uses cars with under 08 passenger seats (excluding the driver's seat) to provide transport services at the request of passengers; fare is determined by one of the following methods chosen by the passenger:
- Fare calculated through a taximeter;
- Fare calculated through a fare calculation software directly connected to passengers via electronic means;
- Fare agreed upon with the transport business unit.
(4) Contract-based passenger transport business uses cars for transporting passengers through written transport contracts between the passenger transport business unit and the renter, including driver hire.
In the case of transport businesses using cars with a seating capacity of 08 or more (excluding the driver's seat), a written transport contract is required between the passenger transport business unit and the renter for hiring the entire vehicle, including the driver.
Is the fixed-route passenger transport activity subject to VAT in Vietnam?
Based on Article 3 of the 2008 Value-Added Tax Law, the objects subject to value-added tax are defined as follows:
Objects subject to tax
Goods and services used for production, business, and consumption in Vietnam are subject to value-added tax, except for objects specified in Article 5 of this Law.
Additionally, according to the regulations in Article 5 of the 2008 Value-Added Tax Law, supplemented by Clause 1 Article 3 of the 2014 Law amending tax laws and amended by Clause 1 Article 1 of Law No. 106/2016/QH13, and Clause 1 Article 1 of the 2013 Amended Value-Added Tax Law, the objects not subject to value-added tax are defined as follows:
Objects not subject to tax
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- Public passenger transport by bus, tram.
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Thus, fixed-route passenger transport activities are subject to value-added tax, except when conducted via bus or tram.
What is the VAT rate for fixed-route passenger transport activities?
Based on Article 11 of Circular 219/2013/TT-BTC, regulations on applying a 10% value-added tax rate are as follows:
10% Tax rate
The 10% tax rate applies to goods and services not specified in Articles 4, 9, and 10 of this Circular.
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Simultaneously, according to the regulations in Articles 9 and 10 of Circular 219/2013/TT-BTC, which stipulate 0% and 5% VAT rates, fixed-route passenger transport activities are subject to a 10% tax rate.
However, as per Article 1 of Decree 72/2024/ND-CP, the VAT reduction is defined as follows:
VAT Reduction
- Reduce the VAT rate for groups of goods and services currently subject to 10% VAT, except the following groups:
a) Telecommunications, financial services, banking, securities, insurance, real estate business, metals and manufactured metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products. Details in Appendix I attached to this Decree.
b) Products and services subject to special consumption tax. Details in Appendix II attached to this Decree.
c) Information technology according to the law on information technology. Details in Appendix III attached to this Decree.
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- VAT reduction rate
a) Business establishments calculating VAT by the deduction method are entitled to a VAT rate of 8% for goods and services specified in clause 1 of this Article.
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Thus, fixed-route passenger transport activities will have a reduced VAT rate and are subject to an 8% tax rate.
