Are children studying abroad considered dependants in Vietnam?

Are children studying abroad considered dependants in Vietnam?

Based on point d.1.3, clause 1, Article 9 of Circular 111/2013/TT-BTC which regulates deductions as follows:

Deductions

1. Personal exemptions

The deductions as guided in this Article are subtracted from the taxable income of individuals before determining taxable income from salaries, wages, or business. Specifically, as follows:

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d.1.3) Children studying in Vietnam or abroad at the university, college, vocational secondary, or vocational training level, including children 18 years or older attending high school (including the waiting period for university results from June to September of grade 12) with no income or an average monthly income in the year from all sources not exceeding VND 1,000,000.

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Therefore, children studying at universities abroad with no income or an average monthly income in the year from all sources not exceeding VND 1,000,000 are eligible for personal exemptions.

Are children studying abroad considered dependants in Vietnam? (Image from the Internet)

How to register dependants for personal exemptions in Vietnam?

Based on clause 10, Article 7 of Circular 105/2020/TT-BTC, the guidance on taxpayer registration dossiers for dependants is as follows:

(1) In case of authorizing the income-paying organization

- In cases where individuals authorize the income-paying organization to carry out taxpayer registration for dependants, they must submit the taxpayer registration dossier at the income-paying organization.

- The taxpayer registration dossier for dependants includes:

+ Authorization document and dependant's documents such as:

++ A copy of the National Identity Card or valid ID Card for dependants with Vietnamese nationality aged 14 or older;

++ A copy of the Birth Certificate or valid Passport for dependants with Vietnamese nationality under 14 years old;

++ A copy of the Passport for dependants who are foreigners or Vietnamese nationals living abroad.

+ The income-paying organization compiles and submits the taxpayer registration declaration form 20-DK-TH-TCT to the tax authority managing the income-paying organization directly.

(2) In case of directly registering taxpayers for dependants

If individuals do not authorize the income-paying organization for taxpayer registration for dependants, they must submit the taxpayer registration dossier to the corresponding tax authority as prescribed in clause 9, Article 7 of Circular 105/2020/TT-BTC.

- The taxpayer registration dossier includes:

+ Taxpayer registration declaration form 20-DK-TCT;

+ A copy of the National Identity Card or a valid ID Card for dependants with Vietnamese nationality aged 14 or older;

+ A copy of the Birth Certificate or valid Passport for dependants with Vietnamese nationality under 14 years old;

+ A copy of the valid Passport for dependants who are foreigners or Vietnamese nationals living abroad.

In the case of individuals obliged to pay personal income tax who have submitted dependant registration dossiers for personal exemptions before the effective date of Circular 95/2016/TT-BTC on June 28, 2016, of the Ministry of Finance but have not registered taxpayers for dependants, they must submit the taxpayer registration dossier as stated in this clause to be issued a taxpayer code for dependants.

How many dependants can a person have for the purpose of personal exemptions in Vietnam?

According to point c, clause 1, Article 9 of Circular 111/2013/TT-BTC:

Deductions

1. personal exemptions

c) Principles for personal exemptions

c.2) personal exemptions for dependants

c.2.1) Taxpayers are eligible for personal exemptions for dependants if they have registered taxpayers and been issued a taxpayer code.

c.2.2) When taxpayers register for personal exemptions for dependants, the tax authority will issue a taxpayer code for dependants, and temporary personal exemptions will be calculated within the year since registration. For dependants registered for personal exemptions before the effective date of this Circular, they will continue to receive personal exemptions until a taxpayer code is issued.

c.2.3) In case taxpayers have not calculated personal exemptions for dependants within the tax year, they may calculate deductions for dependants from the month the obligation of support arises, provided that the taxpayer settles taxes and registers personal exemptions for dependants. In the case of other dependants as guided in section d.4, point d, clause 1 of this Article, the deadline for registering personal exemptions is December 31 of the tax year; beyond this deadline, deductions will not be calculated for that tax year.

c.2.4) Each dependant can only be considered for deduction once from a single taxpayer in the tax year. In cases where multiple taxpayers share a dependant, they must agree on whom to apply the personal exemption.

The law only stipulates that each dependant can be considered for a deduction once by a single taxpayer in a tax year and does not limit the maximum number of dependants a person may have for considering personal exemptions in personal income tax.