App-based taxi drivers likely to pay personal income tax

Income that drivers receive from business cooperation contracts with app-based taxi services will be subject to personal income tax with the tax rate of 1.5 percent, according to a draft circular from the Ministry of Finance.

The Ministry of Finance informed that the new principle of tax collection will make the businesses easy to declare and pay tax for drivers and do not increase the driver's tax liability. 

(Illustrative photo:SGGP)
In particular, in case the drivers are rewarded for service quality that was previously subject to 10 percent tax, they are now paid only 1.5 percent.

Accordingly, the ministry has been collecting comments about the draft circular guiding the implementation of several articles of Tax Administration Law and Decree 126/2020/ND-CP detailing some articles of the Law on Tax Administration.

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