Are dependants in the same household registration as the PIT taxpayer to be eligible for personal exemption in Vietnam?

Are dependants in the same household registration as the PIT taxpayer to be eligible for personal exemption in Vietnam?

Based on Clause 3, Article 12 of Decree 65/2013/ND-CP, amended by Clause 4, Article 6 of Decree 12/2015/ND-CP, which stipulates the subjects and basis for determining dependants whom the taxpayer has the obligation to support as follows:

personal exemption

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3. The subjects and basis for determining dependants whom the taxpayer has the obligation to support as stipulated in Clause 1 of this Article are as follows:

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

b) Children (including biological children, adopted children, stepchildren of the wife, stepchildren of the husband) from 18 years old and above with a disability preventing them from working;

c) Children (including biological children, adopted children, stepchildren of the wife, stepchildren of the husband) who are attending university, college, professional secondary schools, vocational training, including those over 18 years old attending general education and not earning income or earning income not exceeding the income level stipulated in Clause 4 of this Article;

d) Those beyond working age, or those within working age as prescribed by law but with a disability preventing them from working and not earning income or earning income but not exceeding the income level stipulated in Clause 4 of this Article, including:

- The taxpayer's spouse;

- Biological father, mother, stepfather, stepmother, adoptive parents, father-in-law, mother-in-law (or father-in-law, mother-in-law) of the taxpayer;

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

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In addition, according to the provisions of Point g, Clause 1, Article 9 of Circular 111/2013/TT-BTC, amended by Article 1 of Circular 79/2022/TT-BTC on documents proving the dependants of personal income taxpayers, the basis for determining dependants does not require them to be in the same household registration as the PIT taxpayer, and the proof documents for dependants do not include household registration book paperwork.

Thus, dependants do not necessarily need to be in the same household registration as the PIT taxpayer to qualify for personal exemption, but only need to meet the criteria stipulated.

Are dependants in the same household registration as the PIT taxpayer to be eligible for personal exemption in Vietnam? (Image from Internet)

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

Based on Article 1 of Resolution 954/2020/UBTVQH14, the regulation on personal exemption level is as follows:

personal exemption level

Adjust the personal exemption level stipulated in Clause 1, Article 19 of the Law on Personal Income Tax number 04/2007/QH12, amended and supplemented by some articles according to Law number 26/2012/QH13 as follows:

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

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

Therefore, the personal exemption level for a PIT taxpayer with dependants is determined as follows:

- For the PIT taxpayer: 11 million VND/month.

- For dependants: 4.4 million VND/month per dependant, increasing progressively with the number of dependants.

Vietnam: How many maximum dependants can a PIT taxpayer have?

Based on sub-item c.2, Point c, Clause 1, Article 9 of Circular 111/2013/TT-BTC, the regulation on the principles of calculating personal exemptions is as follows:

Deduction items

1. personal exemption

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c) Principles for calculating personal exemption

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c.2) personal exemption for dependants

c.2.1) The taxpayer is entitled to a personal exemption for dependants if the taxpayer has taxpayer registration and has been issued a tax code.

c.2.2) When the taxpayer registers a personal exemption for dependants, the tax authority will issue a tax code for the dependants and temporarily calculate the personal exemption within the year from the registration date. For dependants already registered for personal exemption before the effective date of this Circular, the personal exemption will continue until they are issued a tax code.

c.2.3) If the taxpayer has not calculated the personal exemption for dependants within the tax year, it is still possible to calculate deduction for dependants from the month the support obligation arises when the taxpayer settles tax and registers a personal exemption for dependants. Particularly for other dependants as guided in sub-item d.4, Point d, Clause 1, of this Article, the latest deadline for registration for personal exemption is December 31 of the tax year; after this deadline, personal exemption for that tax year is not allowable.

c.2.4) Each dependant is only eligible for deduction once for one taxpayer in the tax year. In cases where multiple taxpayers share dependants to support, the taxpayer will mutually agree to register the personal exemption under one taxpayer.

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Currently, there is no regulation on the maximum number of dependants a PIT taxpayer can register, only that each dependant is allowed a deduction once for one taxpayer in the tax year.