Daily: Food delivery service Bolt avoids paying couriers' income tax
Daily Postimees reports that one of Estonia's highest profile companies, Bolt, uses a system which, so far, has avoided paying income tax potentially totaling millions, in respect of earnings on the part of its food couriers, which the company refers to as an 'incentive', 'market fee' or 'agency fee', among other terms, while the company acts as a 'mediator'.
Bolt's competitors, such as Wolt, shy away from using such a system, Postimees reports (link in Estonian), while several sources told the daily that given the company's status as one of Estonia's unicorns, which currently number nearly a dozen, there is something of a conspiracy of silence even as the practice may have cost tax coffers as much as €5 million to €10 million over a three-year period.
The fact that many couriers are from outside Estonia may also mean that many of them are unaware of their tax obligations – providing the service as a self-employed person, though a minority of couriers do so as a register OÜ, a company - though, regardless of how you slice it and dice it ("transport costs", "incentive", "application fee" etc.), the money is still salary income meaning it should be liable for tax, a Tax and Customs Board (MTA) told the paper.
A lawyer also referred to Bolt's set-up as "confusing", noting that ultimately it could be interpreted as the restaurants and other sources of food paying the fees and therefore taking on the tax burden, something which most businesses are likely to be unaware of,
Bolt itself – the Bolt Group has subsidiaries including Bolt Technologies OÜ - says: "Bolt is not a recipient of a courier service, but merely mediates the customer's money to the courier, (reported Jaagup Jalakas, the head of Bolt Food Estonia) – a practice which Postimees likened to the paper itself paying journalists, but then stating that these sums are not in respect of work done, but rather "incentives to stimulate subscriber"
The original Postimees piece (in Estonian) is here.
Jalakas told ERR News Wednesday that the company: "Operates in accordance with the law, and we pay taxes correctly in all countries in which we operate."
"We are one of the biggest taxpayers in Estonia and do not evade our obligations. Naturally, we want legal certainty, hence why our tax team has already agreed to a a discussion with the tax authorities," to analyze the issue in more detail," Arras went on.
Speaking to ERR's Vikerraadio earlier in the day, the company's government communications manager Henri Arras said that the company operated a very different business model, regardless of whether the end product to consumers may seem similar.
"Bolt is a platform, we bring together two parties – the restaurant and the customer, while the courier is a third party, and Bolt Food is the broker," he said.
"Competition must take place on the basis of agreed rules, and this is the case, the two companies use different business models," Arras went on.
Bolt, formerly Taxify, was founded in 2013 by the Villig brothers, Markus and Martin, and was originally a ride-hailing app. The food delivery service started in 2019, while other aspects of the company's operations include short-term e-scooter, e-bike and car rentals.
The company employs around 3,000 people worldwide.
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Editor: Andrew Whyte