Renting out car bodies for Grab advertising, car owners must pay 7% tax

Renting out car bodies for Grab advertising, car owners must pay 7% tax

Of that 7% tax, 5% is value added tax and 2% is personal income tax.

The Ho Chi Minh City Tax Department responded as above in a document guiding tax policies for car owners' car introduction service development business activities for GrabTaxi Vietnam Company Limited, based onprescribed in Circular 92.

According to the tax authority, in case Grab reimburses vehicle body advertising service fees to organizations and individuals with business registration under signed contracts or agreements, these organizations and individuals are obliged to make invoices and deliver them to GrabTaxi so that the company has a basis to pay service fees according to regulations.

Although Grab and Uber have been operating in the Vietnamese market for many years, tax policies for these businesses are still in the process of being supplemented and perfected.

According to a recent report by the Ho Chi Minh City Tax Department, the total tax that Grab paid from 2014 to 2016 (three years) was more than 41.38 billion VND, mainly VAT and personal income tax of drivers.

Regarding corporate income tax, according to the tax authority, in the three years from 2014 to 2016, Grab declared a loss of 938 billion VND.

Specifically, in 2014, Grab lost nearly 51.7 billion VND, in 2015 and 2016, Grab lost 441 billion VND and 444 billion VND respectively, the main reason being the huge advertising and marketing costs.

Because it is still losing money, Grab has not had to pay corporate income tax yet.

Meanwhile,Through inspection, the Ho Chi Minh City Tax Department has collected and fined Grab more than 2.98 billion VND and reduced losses by more than 56.5 billion VND.

The Tax Department also proposed that Grab must declare and pay tax on all revenue on all transportation fares collected.