Ride-hailing (VTC) driver: 10% VAT, platform commission and vehicle deduction

Quick answer. A ride-hailing (VTC) driver invoices fares at the reduced 10% VAT rate (passenger transport). The commission charged by Uber or Bolt, a platform established outside France, is reverse-charged at 20%: you report that VAT and deduct it in mirror. The decisive feature: VAT on the vehicle used for passenger transport is deductible, by exception to the rule on passenger cars.

A VTC driver's tax position combines three mechanisms that most service activities never meet together: a reduced output rate, an input reverse charge and an exception on the vehicle. Poorly articulated, these three flows produce either overpaid VAT or a risk of reassessment.

Passenger transport falls under the reduced 10% rate. Your fares are therefore not invoiced at 20%, unlike most services. This applies equally to a ride-hailing driver and to a taxi.

The platform commission follows a different logic. Uber, Bolt and most intermediaries invoice their service from an entity established outside France, frequently in the Netherlands. For a driver liable to French VAT, this is a cross-border B2B service that must be reverse-charged.

Finally, the vehicle. The general rule excludes passenger cars from the right to deduct VAT. Public passenger transport benefits from an exception: VAT on the vehicle used for this activity is recoverable. This exception changes the economics of buying or leasing.

Passenger transport is subject to VAT at the reduced rate of 10%. Concretely, on a fare of 22 euros including tax, the VAT collected is not 20% but 10%, that is 2 euros of VAT for 20 euros excluding tax.

This rate applies to the fare itself, whether the payment goes through an app or is collected directly. The chargeable event remains a passenger transport service.

Be careful not to confuse the rate on your revenue (10%) with the rate on your costs. Most of your expenses (repairs, accessories, subscriptions) bear 20% input VAT, which you recover if you have a right to deduct. This coexistence of rates on one activity is handled like any invoice with several VAT rates.

The reverse charge means the foreign supplier does not invoice French VAT; instead, you report it in its place. You enter the commission VAT both as output VAT and as deductible VAT. The same mechanism applies to platform commissions such as Uber Eats or Deliveroo in catering.

The mechanism is cash-flow neutral when you have a full right to deduct: the output VAT on the commission is entirely offset by the corresponding deductible VAT. The balance payable on that line is nil.

Concretely, if Uber takes 100 euros of commission, you compute 20 euros of VAT (20%), report it as output VAT and report the same 20 euros as deductible VAT. The commission is therefore not an additional VAT cost; it simply has to be reported correctly.

The trap is not financial, it is declarative. A driver who does not report the reverse charge files an incomplete VAT return, even if the balance would have been nil. This is precisely the kind of omission the tax authority can flag during an audit.

Here is a simplified month to visualise the sequence of flows. Amounts are rounded for readability.

In this example, total output VAT (400 euros on fares + 200 euros of reverse charge) comes to 600 euros. Deductible VAT (200 euros of reverse charge + 120 euros + 100 euros) comes to 420 euros. The balance to remit is 180 euros. The reverse charge nets off, and your actual VAT due arises from the gap between fares at 10% and costs at 20%.

Here is the sequence we apply in VTC driver files to secure each return.

1. Invoice or record your fares at 10%. Rebuild your transport revenue from the platform's activity statements and your direct takings.
2. Reverse-charge the platform commission at 20%. Identify the month's commission, compute VAT at 20% and enter it simultaneously as output VAT and as deductible VAT.
3. Deduct VAT on the vehicle and expenses. Recover VAT on purchase, lease, servicing, repairs and costs used for the taxed activity.
4. Report the VAT balance. Carry output and deductible VAT to the return, check the reverse-charge entry, and pay the difference.
5. Keep your supporting documents. Archive platform statements, fuel and servicing invoices, and the lease contract or purchase invoice for the vehicle.

Yes, and it is the most advantageous feature of the trade. Passenger cars are in principle excluded from the right to deduct VAT. A vehicle used for public passenger transport escapes that exclusion: its VAT is deductible.

This deduction extends consistently to vehicle-related spending: acquisition, lease, servicing and repairs follow the right to deduct as long as they are used for the taxed transport activity. The allocation logic echoes that of the deduction coefficient of a partial taxable person where private use exists.

The reasoning applies to both purchase and long-term lease. On a lease, the VAT on each rental is recoverable. On a purchase, the VAT on the invoice is too, provided the vehicle genuinely serves the VTC activity.

The underestimated risk. A vehicle used for both VTC fares and significant private journeys weakens the right to deduct. The tax authority may require the deduction to reflect the share of professional use. Documenting actual use for passenger transport is therefore essential.

VAT on diesel and petrol for vehicles is deductible according to the rules applicable to each vehicle category. For vehicles excluded from the right to deduct, the legislator aligned recovery of diesel and petrol at 80%.

For a VTC vehicle that gives a right to deduct, fuel follows the regime of the taxed transport activity. The overall logic is that the professional vehicle and its consumables serve an activity subject to VAT.

In practice. We recommend staying rigorous on traceability: named fuel invoices, fill by fill, attached to the activity. A solidly justified deduction beats a poorly documented maximal recovery.

VTC driver under the VAT exemption threshold#

A driver whose turnover stays below 37,500 euros (the services threshold) may fall under the VAT base exemption. In that case they invoice no VAT on fares and recover no input VAT, neither on the vehicle nor on expenses.

The single 25,000-euro threshold, considered at one point, was dropped by Act no. 2025-1044 of 3 November 2025. The services threshold therefore remains at 37,500 euros.

Trade-off. The exemption simplifies management but removes all deduction, notably the valuable one on the vehicle. For a driver investing in a recent vehicle, giving up the exemption (or opting out) can be more favourable: they invoice at 10% and recover 20% VAT on costs. The calculation depends on investment volume and turnover.

French platform versus foreign platform#

The reverse charge concerns commissions invoiced by a platform established outside France. If the intermediary invoiced its commission from France with French VAT, you would not reverse-charge it: you would simply deduct the VAT shown on the invoice. Checking where the platform is established on its commission invoices is therefore an essential step.

Vehicle leasing#

A driver who leases the vehicle (long-term lease or finance lease) recovers VAT on each rental, under the same exception as a purchase. It is often a sensible cash-flow choice at the start of the activity, provided the contract clearly allocates the vehicle to the transport activity.

• VAT recodification. From 1 September 2026, the VAT part of the French General Tax Code is recodified within the Code of Levies on Goods and Services (CIBS). This is a renumbering, not a substantive change: the principles (10% on transport, reverse charge, vehicle exception) remain unchanged.
• Omitting the reverse charge. The most frequent error remains simply forgetting the foreign commission on the return.
• Confusing the rates. Collecting at 10% and deducting at 20% is not an anomaly: it is the normal structure of the trade.
• Vehicle allocation. Significant private use can reduce the right to deduct.
• Supporting documents. Without platform statements and compliant invoices, a deduction remains contestable.

In VTC driver files, the most frequent sticking point we encounter is not the fare rate, which is well understood, but the reverse charge on the commission. Recently, a newly established driver believed that the Uber commission, invoiced without French VAT, had no bearing on his return. He therefore omitted it. The VAT balance was indeed correct, but his returns were formally incomplete, which could have cost him dearly in an audit.

The second recurring misunderstanding concerns the vehicle. Many drivers are unaware of the exception applicable to passenger transport and refrain from recovering VAT on their vehicle, as if it were an ordinary passenger car. They thereby deprive themselves of a perfectly legitimate deduction, sometimes worth several thousand euros.

What the tax authority looks at. The consistency between the declared activity, the rate applied and the vehicle's allocation. A VAT deduction on a vehicle assumes a genuine passenger transport activity, revenue at 10% and probative supporting documents. It is this overall consistency that secures the file.

Hayot Expertise advice. Before signing a vehicle purchase or lease, check your VAT regime: the deduction only makes sense if you are actually liable. Keep a monthly record separating fares at 10%, reverse charge at 20% and deductible VAT. If in doubt about the exemption or the option, a review with your chartered accountant avoids costly arbitrages that are hard to undo.