It is the tax-filing season again!
Here are some frequently asked questions (FAQs) if on tax-filing for Go-Jek and Grab Drivers.
Are Go-Jek/Grab drivers required to file taxes
Yes, all drivers regardless of you are full-time, part-time, ad-hoc or one-off drivers are required to declare. If you are employed as a driver under a limousine company, check with the company if they are under the auto-inclusion scheme or have they filed for you
Income from Social Carpooling such as GrabHitch
For private-hire drivers who provide social carpool services such as GrabHitch and Ryde, on top of providing the regular chauffeured ride services (JustGrab, UberFlash etc) are required to pay taxes on income derived from social carpooling.
Private-Car drivers who provide social carpool trips and adheres to the conditions set out in the Road Traffic (Car Pools) Exemption Order such as not making more than 2 social carpool trips a day and the amount collected for each carpool trip does not exceed what is required to cover the costs incurred to make that trip, the income is not taxable.
What can I declare as expenses
The changes to the Income Tax Act was passed in Parliament on 2 October 2018. Private-hire drivers will be allowed to claim tax deductions on car-related expenses.
Previously, private-hire drivers were subjected to taxes on their gross earnings. Major expenses like petrol, rental cost and maintenance cost were not allowed as expenses for tax-deduction.
What does it mean for Private-Hire Drivers
Private-hire Drivers will be able to enjoy the same tax treatment of their taxi counterparts to enjoy on car-related expenses. 60 per cent of the income derived from driving can be considered as expenses.
For example – A drivers who make $70,000 in fares and incentives will be able to declare $42,000 as car-related expenses. The taxable amount will become – $70,000 – $42,000 = $28,000.
How Much Tax Do I Have to Pay?
The amount of tax depends on the tax bracket you are in. The more you earn, the more you pay!
The tax rate for Singapore Resident with effect from YA 2017 onwards has not changed, it is also applicable for the year 2020.
The taxable amount for private-hire drivers is the net trade income. Net trade income is the gross earnings minus allowable business expenses.
Private-hire drivers are allowed an expense ratio of 60% of gross income.
Simplify it – If you made $100,000 in fares, incentives etc, you are allowed to declare 60% as expenses. The net trade income will be $100,000 X 40% = $40,000
Tax payable on $40,000 = $550
When is the deadline
Paper filing dateline is 15 April 2020, E-Filing dateline is 18 April 2020.
How and Where to File
If you have opted for auto-inclusion with Grab, Grab would have submitted your earnings information to Grab. You just need to log-in to IRAS tax portal, acknowledge and click on submit before the deadline.
For those who did not opt in to auto filing by Grab and prefer to leave their personal taxes in their own hands, they can e-file themselves.
Go to IRAS website and login with your SingPass to file
You have to report the 4-line statement of your business as follows:
1. Revenue (Total fees received)
2. Gross Profit/Loss (For service business, the gross profit is equal to your revenue)
3. Allowable Business Expenses
4. Adjusted Profit/Loss
For Revenue of $100,000 or less, you have to report only 2-line statement ie REVENUE and ADJUSTED PROFIT/LOSS.
For Revenue of $100,001 to $499,999, you have to report 4-line statement as above.
For revenue of $500,000 or more, you are required to submit certified Statement of Accounts. A complete set of certified Statement of Accounts comprises the certified Profit & Loss Account and Balance Sheet.