Are grandchildren considered dependants for personal exemptions in Vietnam in 2024? What is the personal exemption level in 2024?

Are grandchildren considered dependants for personal exemptions in Vietnam in 2024?

Based on Clause 1, Article 104 of the Marriage and Family Law 2014, the regulation states:

Rights and Obligations of Maternal and Paternal Grandparents and Grandchildren

1. Maternal and paternal grandparents have the rights and obligations to look after, care for, educate their grandchildren, live exemplary lives, and set good examples for their children and grandchildren. In cases where grandchildren are minors, have reached adulthood but lost civil act capacity, or are unable to work and do not have the assets to support themselves without a guardian as per Article 105 of this Law, the grandparents have the obligation to support their grandchildren.

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Further, based on Point d, Clause 1, Article 9 of the Circular 111/2013/TT-BTC, regarding the principles of calculating personal exemptions, it states:

Deductible Items

The deductible items as guided in this Article are those deducted from an individual's taxable income before calculating tax liability on salaries, wages, and business income. To be specific:

1. personal exemption

As stipulated in Article 19 of the Personal Income Tax Law; Clause 4, Article 1 of the Law amending and supplementing several articles of the Personal Income Tax Law; Article 12 of Decree No. 65/2013/ND-CP, the personal exemption is executed as follows:

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d) dependants include:

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

d.1.1) Children under 18 years of age (calculated fully by months).

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

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

d.1.3) Children studying in Vietnam or abroad at the university, college, vocational, or professional secondary education levels, including those aged 18 and older in upper secondary education (even during the period waiting for university exam results from June to September of 12th grade) without income or with an average monthly income not exceeding 1,000,000 VND from all sources.

d.2) The spouse of the taxpayer meeting the conditions described in point d, Clause 1, of this Article.

d.3) Biological parents; parents-in-law; stepparents; legal adoptive parents of the taxpayer meeting the conditions at point d, Clause 1, of this Article.

d.4) Other individuals with no source of support who the taxpayer must directly support, meeting the conditions at point d, Clause 1, of this Article, including:

d.4.1) Siblings of the taxpayer.

d.4.2) Paternal grandparents; maternal grandparents; uncles, aunts, paternal and maternal great-uncles of the taxpayer.

d.4.3) Nephews and nieces of the taxpayer, including children of siblings.

d.4.4) Other individuals required to be directly supported as per the law.

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Additionally, Official Dispatch 4758/TCT-DNNCN 2023 provides guidance as follows:

Based on the above regulations, in cases where the taxpayer registers personal exemptions for dependants who are grandchildren (while the parents are still of working age, have the ability to work, and can support them), they are not classified as eligible for personal exemptions as per Point d, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC of the Ministry of Finance.

Therefore, grandchildren are not eligible for personal exemptions in 2024 as long as their parents are of working age, have the capacity to work, and can support them.

Moreover, maternal and paternal grandparents have the rights and obligations to look after, care for, educate their grandchildren, live exemplary lives, and set good examples; if the grandchildren are minors, have reached adulthood but lost civil act capacity, or are unable to work and do not have the assets to support themselves without a guardian, the grandparents have the obligation to support their grandchildren.

Are grandchildren considered dependants for personal exemptions in Vietnam in 2024?  What is the personal exemption level in 2024? (Image from the Internet)

What is the personal exemption level in Vietnam in 2024?

Based on Article 1 of Resolution 954/2020/UBTVQH14, the following is stated:

personal exemption Level

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

1. The deduction level for taxpayers is 11 million VND/month (132 million VND/year);

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

Thus, the personal exemption level in 2024 is:

- For taxpayers: 11 million VND/month (132 million VND/year).

- For each dependant: 4.4 million VND/month.

What is included in the dossier for personal exemption for dependants in Vietnam?

Based on sub-section 3, Section 3 of Official Dispatch 883/TCT-DNNCN 2022, the dossier for personal exemption for dependants includes:

[1] For individuals submitting dependant registration forms directly at the tax office

- dependant registration form

- Documents proving dependency

Note: In cases where the dependant is directly supported by the taxpayer, confirmation from the Commune/Ward People's Committee where the dependant resides is required.

[2] For individuals registering personal exemptions for dependants through an income-paying organization or individual

- dependant registration form

- Documents proving dependency

Note: In cases where the dependant is directly supported by the taxpayer, confirmation is required from the People's Committee.

- Consolidated list of dependants for personal exemptions.