Tax Holiday for Ride-Hailing Drivers

Drivers of ride-hailing services like Snapp and Tap30 are exempted from paying tax for now, the director of Iranian National Tax Administration told reporters on August 20.

A point that keeps on coming up is that with more than 100,000 ‘gig economy’ jobs created by such companies, drivers and delivery bikers in theory should be listed as self-employed.

However, according to Kamal Taqavi “Like the taxi drivers, ride-hailing drivers working with app-based services are exempted from paying income tax,” ILNA reported.

However, the official noted that the companies owning the services must pay corporation tax. He did not say how the tax would be calculated.

“Every profit-making business regardless of its field of activity must pay taxes,” he said.

Online businesses have grown exponentially in recent years in Iran and some have been able to outpace traditional businesses and grab bigger  shares of the market.

According to Taqavi, the government is planning to introduce a tax system for Internet-based businesses. Details are not available.

On August 16, former Telecoms Minister Mahmoud Vaezi called for addressing the “unclear status” of tax online businesses should pay.

“Such businesses need better support and statutory regulations,” Vaezi was quoted as saying by Fars News Agency.

One source, who spoke on the condition he not be named, said the popular applications are “making a loss” to offset any potential big tax bill sent by the taxman.

In addition, the contract between the driver and application is such that drivers are not directly on the payroll but in essence self-employed.

The former minister said putting in place new regulatory and tax frameworks is not simple because  gig economy businesses differ from traditional employer-employee structures.