Do Grab drivers in Vietnam have to pay PIT? If yes, how much is the PIT payable?
Do Grab drivers in Vietnam have to pay PIT?
Pursuant to Point c, Clause 5, Article 7 of Decree 126/2020/ND-CP has the following provisions:
Tax declaration dossier
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5. The organization or individual that declares or pays tax on behalf of another taxpayer shall comply with the same regulations on tax declaration and payment in this Decree. To be specific:
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c) In case of business cooperation between an organization and an individual, tax shall not be directly declared by the individual. The organization shall declare VAT on the whole revenue that is the result of the business cooperation regardless of how the revenue is distributed between the parties, and declare and pay personal income tax on behalf of the individual. In case of business cooperation between an organization and a household business or individual business defined in Clause 5 Article 51 of the Law on Tax administration who has the same business lines as the organization, both the late payment interest and the individual shall declare tax as per regulations.
In terms of form, Grab drivers are identified as business individuals, the relationship between Grab drivers and transport businesses is considered business cooperation.
At the same time, based on Clause 2, Article 4 of Circular 40/2021/TT-BTC stipulates as follows:
Tax calculation rules
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2. A household business or individual business whose revenue from business operation in the calendar year is not exceeding 100 million VND shall not be required to pay VAT and PIT as prescribed by VAT and PIT laws. Household businesses and individual businesses shall declare tax truthfully and accurately; submit tax documents punctually; take legal responsibility for the accuracy, truthfulness and adequacy of the tax documents submitted.
Therefore, according to the above regulations, if a Grab driver has an income of 100 million or more, he will have to pay PIT according to regulations.
In addition, the organization is responsible for declaring and paying personal income tax on behalf of business cooperation individuals, namely Grab drivers.
Do Grab drivers have to pay PIT? If yes, how much is the PIT payable? (Image from the Internet)
What is the PIT rate for Grab drivers in Vietnam?
As mentioned above, Grab drivers only have to pay PIT when earning 100 million VND or more. At this time, the payable PIT rate according to the provisions in Appendix I issued together with Circular 40/2021/TT-BTC is as follows:
View the entire list of industries, calculation of VAT and PIT as a percentage of turnover for business households and individuals as specified in Appendix I to Circular 40/2021/TT-BTC.
Thus, the payable PIT rate for transportation activities of Grab drivers with incomes over VND 100 million is 1.5%. At this time, Grab will support withholding and paying PIT for Grab drivers according to the provisions at point c, clause 5, Article 7 of Decree 126/2020/ND-CP
Note: Grab only collects and pays for the shared revenue that the driver receives from the rides generated from the Grab app and the rewards that the driver receives from Grab.
When is the deadline for organizations to submit tax returns on behalf of Grab drivers in Vietnam when doing business?
Pursuant to Point a, Clause 3, Article 16 of Circular 40/2021/TT-BTC stipulating the deadline for submitting tax declaration dossiers in case the organization declares and pays tax on behalf of business individuals as follows:
Tax calculation in case organizations and individuals declaring and paying tax on behalf of other individuals
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3. Deadlines for submission of tax declaration dossiers
Tax declaration dossiers shall be submitted by the deadlines specified in Point a Clause 1 and Clause 3 Article 44 of the Law on Tax Administration. To be specific:
a) Deadlines for submission of monthly or and quarterly tax declaration dossiers:
a.1) The monthly tax declaration dossier shall be submitted by the 20th of the month succeeding the month in which tax is incurred.
a.2) The quarterly tax declaration dossier shall be submitted by the last day of the first month of the quarter succeeding the quarter in which tax is incurred.
Thus, if an organization declares or pays tax on behalf of an individual who submits a monthly tax return, the deadline for filing a tax return is the 20th day of the month following the month in which the obligation declare tax instead, pay tax instead.
For the case of quarterly filing of tax returns, the deadline for filing tax returns is the last day of the first month of the next quarter adjacent to the quarter in which the obligation to declare or pay tax is incurred.
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