Jeepney, taxi and TNVS operator taxes: the 3% common carrier tax
This is for someone who earns from carrying passengers by land: a jeepney or UV Express operator with a franchise, a taxi operator, or a TNVS (Grab-type) driver-operator. By the end you will know which percentage tax the law names for a land carrier, which return carries it, why the 8% income tax option is not open to a carrier, and what the tax code says about selling the unit. It explains what the rules say; your RDO decides how your own registration reads.
The tax the law names for land carriers: sec. 117
The tax code has its own percentage tax for passenger carriers by land. Section 117 reads: "Cars for rent or hire driven by the lessee; transportation contractors, including persons who transport passengers for hire, and other domestic carriers by land for the transport of passengers (except owners of bancas and owners of animal-drawn two wheeled vehicle), and keepers of garages shall pay a tax equivalent to three percent (3%) of their quarterly gross sales" (NIRC sec. 117, BIR tax code).
This is a different section from the 3% that a small non-VAT store pays (sec. 116). Both are 3%, but they are separate tax types with separate codes on the return: PT 010 is "Persons exempt from VAT ... (Sec. 116)" and PT 040 is "Domestic carriers and keepers of garages (Sec. 117)" (BIR Form 2551Q).
Carrying passengers by land is not on the VAT list. The code exempts from VAT "services subject to percentage tax under Title V" (NIRC sec. 109(E)), and sec. 117 is in Title V. Carrying goods or cargo by land is a different matter: sec. 108(A) puts "domestic common carriers by land relative to their transport of goods or cargoes" under VAT (NIRC sec. 108(A)).
TNVS: a franchise (CPC) or only an accreditation
BIR wrote about TNVS partners in 2015: "If the Partner is a holder of a CPC, said Partner is a common carrier and is subject to the 3% common carriers tax provided for under Section 117 of the NIRC." A partner without a CPC was treated as "a land transportation service contractor" under the VAT system or the sec. 116 percentage tax, and "An Accreditation issued by the LTFRB is not in itself a CPC" (RMC No. 70-2015).
That circular came before the present wording of sec. 117, which now also names "transportation contractors, including persons who transport passengers for hire" (NIRC sec. 117). Its peso threshold for VAT is also an old figure. So do not pick the tax type yourself: bring your LTFRB papers (the CPC or the provisional authority, or only the accreditation) to your RDO and ask which percentage tax goes on your Certificate of Registration.
The return: 2551Q every quarter
The 2551Q is filed by "Domestic carriers and keepers of garages, except owners of bancas and owners of animal-drawn two wheeled vehicle", and "The return shall be filed and the tax paid within twenty five (25) days after the end of each taxable quarter" (2551Q guidelines).
Quarter · Ends · Due (25 days later); 1st · 31 March · 25 April; 2nd · 30 June · 25 July; 3rd · 30 September · 25 October; 4th · 31 December · 25 January
On the form, the line for a land carrier is ATC PT 040, at 3% (BIR Form 2551Q). Fill it on BIR Form 2551Q; the 2551Q guide walks through each part.
Why the 8% income tax rate is not for a carrier
The 8% option is "in lieu of the graduated income tax rates under Section 24(A) and the percentage tax under Section 116", and "The option to be taxed at 8% income tax rate is not available to a VAT-registered taxpayer ... and to a taxpayer who is subject to Other Percentage Taxes under Title V of the Tax Code, as amended, except those subject under Section 116" (RR 8-2018, sec. 3).
Sec. 117 is one of those other percentage taxes. So an operator who pays the carrier's tax stays on the graduated income tax rates, files the quarterly 1701Q like every individual in business (RMO 23-2018 digest), and pays the 3% on the 2551Q as well. If your RDO registers you under sec. 116 instead (see the TNVS section), the 8% or graduated guide applies.
Registering
The 2015 circular names the forms: "BIR Form 1901 (for individuals) or 1903 (for corporations or partnerships)", or 1905 to update a registration you already have (RMC No. 70-2015). An individual operator fills BIR Form 1901. The transport operator pack lists the steps with LTFRB, the LTO, SSS, PhilHealth and Pag-IBIG.
Selling the jeepney or car
The 6% capital gains tax and BIR Form 1706 are for land and buildings. The code imposes that tax on gains from "the sale, exchange, or other disposition of real property located in the Philippines, classified as capital assets" (NIRC sec. 24(B)(4), BIR tax code). A vehicle is not real property.
A unit you used in the business is also not a "capital asset": the code leaves out "property used in the trade or business, of a character which is subject to the allowance for depreciation" (NIRC sec. 39(A)(1)). A private car sold by someone not in business is a capital asset; for an individual, only 50% of the gain counts if the car was held more than twelve months (NIRC sec. 39(B)). How the sale of your own unit is reported is a question for your RDO or a CPA. The deed itself is the Deed of Absolute Sale: choose "Motor vehicle" and it prints the plate, engine, chassis, MV file and OR/CR numbers, and no capital gains tax clause.
Mistakes that cost operators
- Filing the 2551Q under PT 010 (the sec. 116 line for small stores) when your registration says sec. 117: the code on the form must match the tax type on your Certificate of Registration. - Choosing 8% on the 1901 while paying the carrier's tax. RR 8-2018 closes the 8% option to other percentage taxes (RR 8-2018, sec. 3). - Using the land-sale guide and Form 1706 for a vehicle sale.
Questions
May 3% common carrier tax ba ang jeepney o TNVS?
The tax code puts a 3% tax on the quarterly gross sales of land carriers of passengers (except bancas and animal-drawn two-wheeled vehicles) (NIRC sec. 117). A 2015 BIR circular said a TNVS partner with a CPC pays it, and one without a CPC falls under VAT or sec. 116 (RMC No. 70-2015). Ask your RDO which one your registration shows.
Pwede ba ang 8% sa Grab driver o jeepney operator?
Not if you pay the sec. 117 carrier's tax: RR 8-2018 says the 8% option is not available to a taxpayer subject to other percentage taxes, except sec. 116 (RR 8-2018, sec. 3).
Anong form ang pang-file ng 3% ng carrier?
BIR Form 2551Q, within 25 days after each quarter, ATC PT 040 (2551Q guidelines).
May capital gains tax ba pag nagbenta ng lumang jeep?
The 6% capital gains tax of the tax code is for real property (NIRC sec. 24(B)(4)), so it is not the tax on a jeep. A jeep used in the business is not a capital asset (NIRC sec. 39(A)(1)); ask your RDO how to report the sale.
Last checked 2026-10-23. Not affiliated with BIR, SSS, PhilHealth, Pag-IBIG or any government agency.