Summary of regulations and answers related to family deductions when calculating personal income tax. Readers are invited to refer to the article below.
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1. Family deduction level 2024
Family deduction is the amount deducted from taxable income before calculating tax on income from salaries and wages of taxpayers who are resident individuals.
Pursuant to Resolution 954/2020/UBTVQH14, the family deduction level in 2024 is as follows:
- The deduction for taxpayers is 11 million VND/month (132 million VND/year);
- The deduction for each dependent is 4.4 million VND/month.
2. Principles for calculating family deductions for the taxpayer himself
Pursuant to Article 9 of Circular 111/2013/TT-BTC, family deductions for taxpayers are made according to the following principles:
- Taxpayers with multiple sources of income from salaries and wages, at one point in time (calculated monthly), choose to calculate family deductions for themselves in one place.
- For foreigners who are individuals residing in Vietnam, family deductions are calculated for themselves from January or from the month of arrival in Vietnam in case the individual first arrives in Vietnam until the month of termination of the labor contract and leaves Vietnam in the tax year (calculated by full month).
- In case during the tax year, an individual has not deducted for himself or her personal deduction has not been completed for 12 months, he or she will be deducted for the full 12 months when performing tax settlement according to regulations.
3. Principles for calculating family deductions for dependents
Pursuant to Article 9 of Circular 111/2013/TT-BTC, family deductions for dependents are implemented according to the following principles:
- Taxpayers are entitled to family deductions for dependents if they have registered for tax and been granted a tax code.
- When a taxpayer registers for family deductions for dependents, the tax authority will issue a tax code for the dependent and the family deduction will be provisionally calculated for the year from the date of registration. Dependents who have been registered for family deductions before the effective date of this Circular will continue to be eligible for family deductions until they are issued a tax code.
- In case the taxpayer has not calculated the family deduction for dependents in the tax year, the deduction for dependents will be calculated from the month in which the obligation to support arises when the taxpayer makes the tax finalization and registers the family deduction for dependents. As for other dependents according to the instructions in Section d.4, Point d, Clause 1 of this Article, the deadline for registering the family deduction is no later than December 31 of the tax year. After the above deadline, the family deduction will not be calculated for that tax year.
- Each dependent can only be deducted once for one taxpayer in the tax year. In case many taxpayers have the same dependent to support, the taxpayers can agree to register the family deduction for one taxpayer.
4. Who are dependents? Conditions for registering dependents?
Pursuant to Point d Clause 1 Article 9 Circular 111/2013/TT-BTC, dependents include:
(1) Children: biological children, legally adopted children, illegitimate children, wife's stepchildren, husband's stepchildren, specifically including:
- Children under 18 years old (calculated by full month).
- Children aged 18 and over with disabilities and unable to work.
- Children studying in Vietnam or abroad at university, college, vocational high school, vocational training, including children aged 18 and over studying at high school (including the time waiting for university entrance exam results from June to September of grade 12) have no income or have an average monthly income in the year from all sources of income not exceeding 1,000,000 VND.
(2) The taxpayer's spouse meets the prescribed conditions.
(3) Biological father, biological mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; legal adoptive father, adoptive mother of the taxpayer who meets the prescribed conditions.
(4) Other individuals without support that the taxpayer is directly supporting and meets the prescribed conditions, including:
- Brother, sister, sibling of the taxpayer.
- Paternal grandfather, paternal grandmother; maternal grandfather, maternal grandmother; paternal aunt, paternal uncle, paternal uncle of the taxpayer.
- Taxpayer's nieces and nephews include: children of biological brothers, biological sisters, and biological siblings.
- The person who must directly support another person according to the provisions of law.
Accordingly, the conditions for registering dependents for individuals mentioned in points (2), (3) and (4) above are specifically as follows:
(i) For people of working age, the following conditions must be met at the same time:
- Disabled, unable to work.
- No income or average monthly income in the year from all sources of income does not exceed 1,000,000 VND.
(ii) For people outside of working age, they must have no income or have an average monthly income in the year from all sources of income not exceeding VND 1,000,000.
In addition, people with disabilities and those who are unable to work are subject to the law on people with disabilities and people with diseases that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).
5. What documents are required to prove dependents?
5.1. Documents proving that the dependent is a child
- Children under 18 years old: Proof of identity is a copy of the Birth Certificate and a copy of the Identity Card or Citizen Identification Card (if available).
- Children aged 18 and over with disabilities and unable to work, supporting documents include:
+ Copy of Birth Certificate and copy of Identity Card or Citizen Identification Card (if any).
+ Copy of Certificate of Disability according to the provisions of law on people with disabilities.
- Children studying at any level in Vietnam or abroad at university, college, vocational high school, vocational training, including children aged 18 and over studying at high school (including the time waiting for university entrance exam results from June to September of grade 12), supporting documents include:
+ Copy of Birth Certificate.
+ Photocopy of Student Card or declaration certified by the school or other documents proving that you are studying at university, college, vocational high school, high school or vocational school.
- In case of adopted children, illegitimate children, or stepchildren, in addition to the documents for each case mentioned above, the proof file must include other documents to prove the relationship such as: a copy of the decision recognizing the adoption, the decision recognizing the adoption of father, mother, or child by a competent state agency...
5.2. Documents proving that the dependent is a wife or husband
- Copy of ID card or Citizen ID card.
- A copy of the Certificate of Residence Information or Notice of Personal Identification Number and Information in the National Population Database or other documents issued by the Public Security Agency (proving the marital relationship) or a copy of the Marriage Certificate.
In case the husband or wife is of working age, in addition to the above documents, the supporting documents must include other documents proving that the dependent is unable to work, such as a copy of the Disability Certificate according to the provisions of the law on disabled people who are unable to work, a copy of the medical record for people with illnesses that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).
5.3. Documents proving that the dependent is a parent
Documents proving dependents for biological father, biological mother, father-in-law, mother-in-law (or father-in-law, mother-in-law), stepfather, stepmother, legal adoptive father, legal adoptive mother, documents proving include:
- Copy of ID card or Citizen ID card.
- Legal documents to determine the relationship of the dependent with the taxpayer such as a copy of the Certificate of residence information or Notice of personal identification number and information in the National Population Database or other documents issued by the Public Security Agency, birth certificate, decision on recognition of father, mother, child by a competent State agency.
In case of working age, in addition to the above documents, the supporting documents must include additional documents proving that the person is disabled and unable to work, such as a copy of the Disability Certificate according to the provisions of the law on disabled people who are unable to work, a copy of the medical record for people with illnesses that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).
5.4. Documents proving that the dependent is a niece or nephew...
In addition to the above-mentioned persons, the law also allows registration of dependents for other individuals without support that the taxpayer is directly supporting if they meet the following prescribed conditions:
- Brother, sister, sibling of the taxpayer.
- Paternal grandfather, paternal grandmother; maternal grandfather, maternal grandmother; paternal aunt, paternal uncle, paternal uncle of the taxpayer.
- Taxpayer's nieces and nephews include: children of biological brothers, biological sisters, and biological siblings.
- The person who must directly support another person according to the provisions of law.
Accordingly, documents proving dependents in these cases include:
- Copy of ID card or Citizen ID card or Birth certificate.
- Legal documents to determine the responsibility for raising children according to the provisions of law.
In case the dependent is of working age, in addition to the above documents, the supporting documents must include additional documents proving the inability to work, such as a copy of the Certificate of Disability according to the provisions of the law on disabled people who are unable to work, a copy of the medical record for people with illnesses that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).
Legal documents to determine the responsibility for support as prescribed by law are any legal documents that determine the taxpayer's relationship with the dependent such as:
- Photocopy of documents identifying the obligation to support according to the law (if any).
- A copy of the Certificate of residence information or Notice of personal identification number and information in the National Population Database or other documents issued by the Public Security Agency.
- Self-declaration of the taxpayer according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP with confirmation from the People's Committee of the commune where the taxpayer resides that the dependent is living with them.
- Self-declaration of the taxpayer according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP with confirmation from the People's Committee of the commune where the dependent is residing that the dependent is currently residing in the locality and has no one to support him/her (in case he/she does not live together).
5.5. Some other notes on documents proving dependents
- Foreign residents, if there is no record according to the instructions for each specific case mentioned above, must have similar legal documents as a basis to prove dependents.
- For taxpayers working in economic organizations, administrative agencies, and public service agencies whose fathers, mothers, wives (or husbands), children, and other persons who are considered dependents have been clearly declared in the taxpayer's personal history, the documents proving dependents must follow the above instructions or only need the Dependent Registration Form according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP with confirmation from the Head of the unit on the left side of the declaration.
The head of the unit is only responsible for the following contents: full name of dependents, year of birth and relationship with the taxpayer; other contents, the taxpayer declares and is responsible for.
- From the date the Tax Authority announces the completion of data connection with the National Population Database, taxpayers do not have to submit the above documents proving dependents if the information in these documents is already available in the National Population Database.
Legal basis:
- Article 9 of Circular 111/2013/TT-BTC;
- Article 1 of Circular 79/2022/TT-BTC.
6. Regulations on deduction for dependents
(a) Taxpayers with income from salaries and wages of VND 11 million/month or less are not required to declare dependents.
(b) Taxpayers with income from salary and wages of over 11 million VND/month to be eligible for family deductions for dependents must declare as follows:
- Register dependents:
+ First time dependent registration:
Taxpayers with income from salaries and wages must register dependents according to the form issued with the guidance document on tax management and submit two (02) copies to the organization or individual paying the income as a basis for calculating deductions for dependents.
Organizations and individuals paying income shall keep one (01) registration copy and submit one (01) registration copy to the directly managing tax authority at the same time as submitting the personal income tax return for that tax period according to the provisions of the law on tax administration.
For individuals who directly declare taxes to the tax authority, the individual shall submit one (01) dependent registration form according to the form issued with the guidance document on tax management to the tax authority directly managing the income-paying organization at the same time as submitting the personal income tax return for that tax period as prescribed.
+ Register when there is a change in dependents:
When there is a change (increase or decrease) in dependents, the taxpayer shall make a supplementary declaration of the change in dependent information according to the form issued with the guidance document on tax management and submit it to the organization or individual paying the income or the tax authority for taxpayers who are required to declare tax directly with the tax authority.
- Location and deadline for submitting documents proving dependents:
+ The place to submit documents proving dependents is where the taxpayer submits the dependent registration form.
The income paying organization is responsible for keeping records proving dependents and presenting them when the tax authority inspects or audits taxes.
+ Deadline for submitting documents proving dependents: within three (03) months from the date of submitting the dependent registration form (including cases of registration of changes to dependents).
After the above deadline for submitting documents, if the taxpayer does not submit documents proving dependents, the deduction for dependents will not be granted and the tax payable must be adjusted.
Note that taxpayers only need to register and submit documents proving each dependent once during the period of calculating family deductions. In case the taxpayer changes his/her workplace or business location, he/she must register and submit documents proving dependents as in the case of registering dependents for the first time according to the instructions above.
7. Instructions for first-time tax registration for dependents
Pursuant to Clause 10, Article 7 of Circular 105/2020/TT-BTC, instructions on submitting first-time tax registration dossiers for dependents are as follows:
- In case an individual authorizes the income paying agency to register tax for dependents, the tax registration application must be submitted to the income paying agency.
Tax registration dossier of dependents includes: Authorization document and documents of dependents (copy of Citizen Identification Card or valid Identity Card for dependents with Vietnamese nationality aged 14 years or older; copy of Birth Certificate or valid Passport for dependents with Vietnamese nationality under 14 years old; copy of Passport for dependents who are foreign nationals or Vietnamese nationals living abroad).
The income paying agency shall compile and send the Tax Registration Declaration Form No. 20-DK-TH-TCT issued with Circular 105/2020/TT-BTC to the tax authority directly managing the income paying agency.
- In case an individual does not authorize the income paying agency to register tax for dependents, submit a tax registration dossier to the corresponding tax authority as prescribed in Clause 9, Article 7 of Circular 105/2020/TT-BTC. The tax registration dossier includes:
+ Tax registration declaration form No. 20-DK-TCT issued with Circular 105/2020/TT-BTC;
DOWNLOAD: Tax Registration Form No. 20-DK-TCT
- Copy of Citizen Identification Card or valid Identity Card for dependents with Vietnamese nationality aged 14 years or older; copy of Birth Certificate or valid Passport for dependents with Vietnamese nationality under 14 years old; copy of valid Passport for dependents with foreign nationality or Vietnamese nationality living abroad.
In case an individual subject to personal income tax has submitted a dependent registration application for family deduction before August 12, 2016 but has not yet registered tax for the dependent, he/she must submit the above tax registration application to be granted a tax code for the dependent.
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