The Vietnamese legal entity of Singapore’s Grab ride-hailing mobile app, formerly GrabTaxi, is responsible for paying taxes on behalf of its partnered drivers, according to a guideline issued Thursday by Vietnam’s taxation authority.
The tax guideline, issued by the Department of Income Tax Management under Vietnam’s General Department of Taxation, had been agreed upon earlier by Vietnamese authorities and GrabTaxi Co., Ltd., which oversees the app’s business in Vietnam.
The firm is to be held responsible for the declaration and payment of its partnered drivers’ personal income tax, in addition to its own corporate income tax.
Grab’s partnered drivers in Vietnam are taxed 4.5 percent of their earnings, of which 1.5 percent is personal income tax and three percent is value-added tax (VAT).
Meanwhile, the VAT rate for the company itself is the five percent rate typical of companies operating as providers of science and technology services.
Founded in 2011 and headquartered in Singapore, Grab is the largest mobile taxi booking app firm in Southeast Asia, providing the service to millions in Malaysia, Singapore, Thailand, Vietnam, Indonesia, and the Philippines.
Although it has been present in Vietnam since 2014, the company was only granted its business license in Vietnam in March.