Bolt has received a number of questions from drivers in relations to their tax returns. We remind you that you should seek advice from a registered tax agent or accountant in regards to personalised advice but we have listed some commonly asked questions for your accountant's consideration.
You should also read the instructions written by the Finnish Tax Office, which describes the most essential requirements for taxi entrepreneurs.
- Is Bolt a foreign company?
As per our driver terms, drivers are contracted to Taxify OÜ, which is an Estonian-based entity. Billing of services will be operated through Taxify OÜ’s Estonian subsidiary Bolt Operations OÜ. The details of this entity are listed on your invoices.
- Are drivers responsible to pay VAT on the full fare?
Yes, drivers are obligated to remit the VAT values as listed on their individual rider invoices in their VAT report (noting that Bolt issues the tax invoices to riders on driver's behalf). VAT level for passenger transportation services in Finland is 10% (as of 2018).
- How is VAT on Ride Fares and Bolt Fees calculated?
The Value Added Tax, or VAT, applies more or less to all services that are rendered in the European Union. VAT is charged, collected and transferred to the tax authorities by businesses and sole traders, however, as VAT is part of the price, the tax is actually paid by the buyer. It is thus an indirect tax.
Further to charging and collecting VAT on services supplied, businesses and sole traders sometimes need to calculate and pay VAT on services purchased (reverse charge). This is mainly the case if the person supplying the service is not established in the country, where service is provided.
In Finland, VAT registration is obligatory if your annual turnover exceeds 10,000 EUR. Still, you may want to register before exceeding this threshold to enjoy the VAT deduction benefit - once you are registered, the VAT you pay on the purchase of goods and services for your business activity (for example, VAT included in the price of petrol, car wash and maintenance or phone bill) is deducted from the VAT you have to pay.
Notwithstanding the above, you are obliged to calculate and pay VAT on Bolt Fees. This is because the service is provided by a non-Finnish entity. If the invoice addressed to you includes a note “reverse charge” (“käännetty verovelvollisuus”), you will need to calculate and pay 24% VAT from those amounts.
The Ride Fare itself is subject to 10% VAT. If you’re a VAT-registered business or sole trader, the Ride Fare is deemed to include VAT, i.e. 1/11 of the amount paid to you by the passenger or Bolt must be reported as VAT. For example: if the Ride Fare is 11 EUR, 1 EUR is VAT. As explained above, VAT-registered businesses and sole traders can reduce the VAT payable if they have incurred VAT on goods and services purchased. VAT paid via the reverse charge mechanism is also deductible.
Ride Fare: 11 EUR
Bolt Fee 10%: 1.10 EUR (11 x 10%)
VAT on Ride Fare: 1 EUR (11 x 1/11)
VAT on Bolt Fee: 0.26 EUR (1.10 x 24%), reverse charge, VAT deductible at the same time
Total income: 11 - 1.1 - 1 - 0.26 + 0.26 = 8.9 EUR
- Are bonuses VAT applicable?
Bolt bonuses constitute remuneration for driver loyalty (your readiness to accept ride requests via Bolt platform). The basis for bonus payment is an invoice issued by the driver. This loyalty service is subject to 0% VAT in Finland (reverse charge applied in Estonia). When you receive a bonus, Bolt will automatically issue an invoice in your name and on your behalf. It is your duty to report this via the EC Sales List (Yhteenvetoilmoitus). Note that Bolt has a separate billing entity, hence the VAT number of Bolt Operations OÜ - EE102090374 - must be indicated for these purposes. You will not have to pay any VAT on the bonus payment, it is, however, part of your business income.
- Where can we find all the necessary documents for accounting?
All the invoices and reports for each driver can be found from Driver Portal (partners.bolt.eu) when driver logs in with his Bolt Driver account credentials.
Rider invoices: Receipts from trips provided by the driver to customers. Bolt generates these invoices on behalf of the driver. A monthly export with VAT breakdown can also be downloaded in csv format.
If you’re a VAT registered business or sole trader, you’ll need to report the net amount of your invoices (without VAT) in your VAT return.
Invoices: Invoices for Bolt fee that Bolt Operations OÜ has sent to the driver.
You’ll need this to determine the value of services subject to reverse-charge.
Compensations: Invoices for bonus compensations from the driver to Bolt Operations OÜ that we’ve generated on behalf of the driver.
You’ll need this to determine the value of service to be included in the VAT return and EC Sales List as 0% VAT-able supply. Service recipient is Bolt Operations OÜ with a VAT nr EE102090374.
We hope this provides clarity to you and to your accountants.