Are adopted children who are aged under 18 years considered dependants when calculating personal income tax in Vietnam?

Are adopted children who are aged under 18 years considered dependants when calculating personal income tax in Vietnam?

Pursuant to Clause 1, Article 21 of the Civil Code 2015, the regulation concerning minors is as follows:

Minors

1. A minor is an individual who is under eighteen years of age.

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Moreover, according to Clause 3, Article 12 of Decree 65/2013/ND-CP detailing the subjects and basis for determining dependants whom taxpayers have the obligation to support, the regulations are as follows:

Personal exemption

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3. Subjects and basis for determining dependants whom taxpayers have the obligation to support as stipulated in Clause 1 of this Article are as follows:

a) Children (including biological children, adopted children, stepchildren of a spouse) under 18 years old;

b) Children (including biological children, adopted children, stepchildren of a spouse) who are 18 years old or older with disabilities that prevent them from working;

c) Children (including biological children, adopted children, stepchildren of a spouse) attending university, college, vocational schools, including those aged 18 years or older still in high school without income or with income not exceeding the stipulated level in Clause 4 of this Article;

d) Individuals outside working age, individuals within working age but with disabilities preventing them from working and without income, or with income not exceeding the stipulated level in Clause 4 of this Article, including:

- Spouse of the taxpayer;

- Biological parents, stepparents, legal adoptive parents, parents-in-law (of the taxpayer);

- Other individuals with no support whom the taxpayer must directly support.

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Thus, a minor adopted child, which refers to individuals under 18 years old, will be considered a dependant when the individual fulfills the obligation of personal income tax.

Are adopted children who are aged under 18 years considered dependants when calculating personal income tax in Vietnam? (Image from the Internet)

What is the personal exemption for personal income taxpayers with dependants in Vietnam?

Pursuant to Article 1 of Resolution 954/2020/UBTVQH14, the regulation concerning personal exemptions is as follows:

Personal exemption

Adjustment of the personal exemption amount stipulated in Clause 1, Article 19 of the Personal Income Tax Law No. 04/2007/QH12, as amended and supplemented by Law No. 26/2012/QH13, as follows:

1. The deduction amount for the taxpayer is 11 million VND/month (132 million VND/year);

2. The deduction for each dependant is 4.4 million VND/month.

Consequently, the personal exemption for the personal income taxpayer is 11 million VND/month, while the deduction for each dependant is 4.4 million VND/month, with an incremental increase based on the number of dependants.

What are regulations on taxable personal income in Vietnam?

Pursuant to Article 3 of the Personal Income Tax Law 2007 (amended by Clause 1, Article 2 of the Law on Amendments and Supplements of a Number of Articles on Tax Laws 2014, Clause 1, Article 1 and Clause 2, Article 2 of the Law amending and supplementing a number of articles of the Personal Income Tax Law 2012), the specifications for taxable personal income are as follows:

- Income from business activities, including:

+ Income from production, trading of goods, and services;

+ Income from independant vocational activities of individuals with practicing certificates or professional licenses as prescribed by law.

- Income from wages and salaries, including:

+ Wages and salaries and other amounts of a salary and wage nature;

+ Allowances and subsidies, except for allowances and subsidies under the law for individuals with meritorious services; defense and security allowances; hazardous and dangerous job allowances or sector allowances; attraction and regional allowances as prescribed by law; abrupt difficulty allowances, occupational accident and disease allowances, one-time childbirth or adoption allowances, allowances due to a decrease in labor capacity, one-time retirement allowances, survivor monthly benefits, and other allowances as per the law on social insurance; severance compensation, job loss compensation under the Labor Code; social protection nature and other non-wage or salary-related allowances and subsidies as prescribed by the Government of Vietnam.

- Income from capital investments, including:

+ Loan interest;

+ Share dividends;

+ Income from other forms of capital investment, excluding income from government bond interest.

- Income from capital transfers, including:

+ Income from the transfer of capital in economic organizations;

+ Income from securities transfer;

+ Income from capital transfer in other forms.

- Income from real estate transfers, including:

+ Income from the transfer of land use rights and attached assets;

+ Income from the transfer of ownership or use rights of houses;

+ Income from the transfer of land lease rights, water surface lease rights;

+ Other income from real estate transfers in any form.

- Income from winnings, including:

+ Lottery winnings;

+ Promotional winnings;

+ Betting winnings;

+ Winnings from prize games, competitions, and other forms of winnings.

- Income from royalties, including:

+ Income from the transfer and franchise use of intellectual property rights;

+ Income from the transfer of technology.

- Income from franchising.

- Income from inheritance, including securities, capital portions in economic organizations, business establishments, real estate, and other assets requiring registration of ownership or usage rights.

- Income from gifts, including securities, capital portions in economic organizations, business establishments, real estate, and other assets requiring registration of ownership or usage rights.