Tax rules for land transport and TNCs

TNCs operate a pool of land vehicles accessible to public via a common contact point (text, phone, email, mobile apps, etc.)
Payment modes vary: cash, debit/credit card, mobile payments, either through TNC platform or paid directly to driver
Vehicles may be owned by parties other than TNC, called Partners
Payment transfers between TNC and Partners can be from TNC to Partner or vice versa based on agreed rates
Vehicles may be owner-driven or driven by employees

TNCs with valid CPC from LTFRB are common carriers taxed 3% on gross receipts (Section 117, NIRC)
TNCs without CPC are classified as land transportation service contractors subject to 12% VAT
Accreditation from LTFRB is not equivalent to CPC
Partners are classified individually depending on CPC possession
Partners with CPC: common carriers, subject to 3% tax
Partners without CPC: service contractors, may register as VAT or non-VAT taxpayers under thresholds

Mandatory registration at Revenue District Office (RDO) using BIR Form 1901 (individuals) or 1903 (corporations/partnerships)
Registration update with BIR Form 1905 if business status changes
Secure Authority to Print (ATP) for official receipts (ORs) and books of accounts, manual or computerized including e-Invoicing systems

TNC issues OR to passengers/customers reflecting total fare; type of OR (VAT or non-VAT) depends on CPC status
Partners must issue OR to TNC or passengers as applicable, following the same VAT or non-VAT rules
Two payment scenarios distinguished:
1. Payment to TNC, then TNC pays Partner
2. Payment to Partner, then Partner pays TNC
Taxation and OR issuance differ depending on holder status of CPC and taxing provisions

TNCs and Partners must withhold appropriate creditable/expanded withholding taxes, final taxes, and taxes on compensation
Withholdings must be remitted timely to BIR with issuance of Tax Withheld Certificates to payees
Payments between TNC and Partners are subject to withholding tax
Filing of tax returns, payment of taxes, and submission of related reports are mandatory

Required to keep books of accounts and all business records as prescribed by law
Records must be available for inspection by authorized Revenue Officers
Tax rules apply equally regardless of marketing channel (internet or physical)

Payments without valid OR and without proper withholding tax remittance are not deductible expenses
Credit card companies must comply with withholding tax rules on payments to TNCs/Partners
Issuance of ORs for all passenger payments is mandatory, no demand needed
Noncompliance including non-registration, failure to issue ORs, and non-withholding may lead to civil and criminal liabilities under NIRC
The circular mandates widespread publicity to ensure awareness and compliance