Are female employees raising young children eligible for personal income tax reduction in Vietnam?

Are female employees raising young children eligible for personal income tax reduction in Vietnam?

Based on the provisions of Article 5 of the 2007 Law on Personal Income Tax Law, it is stipulated as follows:

Tax Reduction

Taxpayers facing difficulties due to natural disasters, fires, accidents, or severe illnesses affecting their tax payment capacity may be considered for tax reduction corresponding to the extent of the damage, but not exceeding the payable tax amount.

According to the above provision, only those who face difficulties due to natural disasters, fires, accidents, or severe illnesses affecting their ability to pay taxes are eligible for tax reduction corresponding to the extent of the damage but not exceeding the personal income tax payable.

Therefore, if a female employee raising a young child does not belong to any of the aforementioned cases affecting her ability to pay taxes, she will not be considered for a personal income tax reduction.

Do female employees raising young children Qualify for Family Allowance Deductions When Paying Personal Income Tax?

Based on the provisions at Point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC (The provisions related to personal income tax for business individuals in this article are annulled by Clause 6, Article 25 of Circular 92/2015/TT-BTC) concerning family allowance deductions are as follows:

Deductions

The deductions guided in this Article are the amounts deducted from an individual's taxable income before determining the taxable income from salaries, wages, and from businesses. Specifically:

1. Family Allowance Deductions

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d) Dependents include:

d.1) Children: biological children, legally adopted children, illegitimate children, stepchildren of the wife or husband, specifically including:

d.1.1) Children under 18 years of age (calculated in full months).

Example 10: Mr. H's child, born on July 25, 2014, is considered a dependent from July 2014.

d.1.2) Children aged 18 and over with disabilities, unable to work.

d.1.3) Children studying in Vietnam or abroad at the university, college, vocational or training level, including those 18 years or older still in high school (including the waiting period for university results from June to September of the 12th grade) without income or with an average monthly income in the year from all sources not exceeding 1,000,000 VND.

d.2) Spouse of the taxpayer meeting the condition at Point đ, Clause 1, this Article.

d.3) Biological parents, parents-in-law (or parents of the husband), stepfather, stepmother, or legally adoptive parents of the taxpayer meeting the condition at Point đ, Clause 1, this Article.

d.4) Other individuals without dependents whom the taxpayer directly supports and meet the condition at Point đ, Clause 1, this Article, including:

d.4.1) Siblings of the taxpayer.

d.4.2) Grandparents, aunts, uncles, by blood relation of the taxpayer.

d.4.3) Niece and nephew of the taxpayer, including the children of siblings.

d.4.4) Other individuals requiring direct care according to legal regulations.

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As such, female employees raising young children will qualify for family allowance deductions when paying personal income tax.

Are female employees raising young children eligible for personal income tax reduction in Vietnam? (Image from the Internet)

What income from salaries and wages of employees is subject to personal income tax in Vietnam?

Based on the provisions of Clause 2, Article 3 of the 2007 Law on Personal Income Tax Law, amended by Clause 1, Article 1 of the 2012 Law on Amendments to the Law on Personal Income Tax on income from salaries and wages of employees subject to personal income tax, as follows:

(1) Salaries, wages, and other payments of a salary or wage nature;

(2) Allowances and subsidies, except:

- Allowances and subsidies as stipulated in laws on preferential treatment for people with meritorious services;

- Defense and security allowances;

- Hazard allowances for occupations or jobs at workplaces with hazardous conditions;

- Attraction and regional allowances in accordance with the law;

- Sudden hardship subsidies, allowances for labor accidents, occupational diseases, one-time allowances for childbirth or adoption, allowances due to reduced working capacity, one-time retirement allowances, monthly death benefits, and other subsidies in accordance with the laws on social insurance;

- Severance and job loss allowances in accordance with the Labor Code;

- Social protection-based allowances and other allowances, and subsidies not of a salary or wage nature in accordance with regulations of the Government of Vietnam.