Can parents of working age be considered for personal exemption when paying personal income tax in Vietnam?

What is the current personal exemption level in Vietnam?

Pursuant to the provisions in Article 19 of the Law on Personal Income Tax 2007, amended by Clause 4, Article 1 of the Law on Amendments to the Law on Personal Income Tax 2012, Article 1 of Resolution 954/2020/UBTVQH14 (Regulations related to the determination of tax for business individuals in Clause 1 of this Article are repealed by Clause 4, Article 6 of the Law amending Tax Laws 2014), the personal exemption is the amount deducted from taxable income before tax calculation for income from business, salary, wages for taxpayers who are resident individuals.

The personal exemption includes:

- personal exemption of 11 million VND/month (132 million VND/year) applicable to the taxpayer themselves;

- personal exemption of 4.4 million VND/month applicable for each dependant of the taxpayer.

Can parents of working age be considered for personal exemption when paying personal income tax in Vietnam? (Image from the Internet)

Can parents of working age be considered for personal exemption when paying personal income tax in Vietnam?

Based on the provisions in Clause 1, Article 9 of Circular 111/2013/TT-BTC (Provisions related to personal income tax for business individuals in this Article are repealed by Clause 6, Article 25 of Circular 92/2015/TT-BTC), the provisions on personal exemption are as follows:

Deductible items

The deductible items as guided in this Article are the amounts deducted from the taxable income of individuals before determining taxable income from salary, wages, or business. Specifically, as follows:

1. personal exemption

...

d) dependants include:

...

d.3) Biological father, biological mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; legally adoptive father, or adoptive mother of the taxpayer who meet the conditions stated at point đ, clause 1, this Article.

d.4) Other individuals who have no place to rely on, whom the taxpayer is directly raising and who meet the conditions stated at point đ, clause 1, this Article include:

d.4.1) Biological siblings of the taxpayer.

d.4.2) Grandparents, uncles, aunts, uncles, aunts of the taxpayer.

d.4.3) Nephews of the taxpayer including the children of siblings.

d.4.4) Other individuals directly cared for as per the provisions of the law.

dd) Individuals considered as dependants under the guidance in clauses d.2, d.3, d.4, point d, clause 1, this Article must meet the following conditions:

dd.1) For individuals of working age, they must simultaneously meet the following conditions:

dd.1.1) Disabled, incapable of working.

dd.1.2) Have no income or have an average monthly income in the year from all sources not exceeding 1,000,000 VND.

dd.2) For individuals outside the working age, they must have no income or their average monthly income in the year from all sources must not exceed 1,000,000 VND.

From the above regulations, it can be seen that parents of working age can still be considered for a personal exemption when paying personal income tax if they simultaneously satisfy the following conditions:

- Disabled, incapable of working.

- Have no income or have an average monthly income in the year from all sources not exceeding 1,000,000 VND.

What documents are required to apply for a personal exemption for parents of working age in Vietnam?

Based on the provisions in point g, Clause 1, Article 9 of Circular 111/2013/TT-BTC, amended by Article 1 of Circular 79/2022/TT-BTC, the documents proving dependants as parents of working age for personal exemption when paying personal income tax are as follows:

- A photocopy of the National ID card or Citizen Identification card.

- Legal documents to determine the relationship of the dependant with the taxpayer, such as a photocopy of the Certificate of Residence Information, or Notification of Personal Identification Number and information in the National Population Database, or other documents issued by the Police Authority, birth certificate, decision to recognize the parent-child relationship by a competent State authority.

- Proof documents must include additional documents proving the person is disabled, incapable of working, such as a photocopy of the Disability Certificate in accordance with the laws on persons with disabilities for those who are disabled and incapable of working, a photocopy of medical records for those suffering from diseases making them incapable of working (such as AIDS, cancer, chronic kidney failure, etc.).

How to register dependants for the first time concerning income from salary, wages in Vietnam?

Pursuant to the provisions in point h, Clause 1, Article 9 of Circular 111/2013/TT-BTC, the method to register dependants for the first time concerning income from salary and wages is as follows:

- Taxpayers with income from salary, wages register dependants using the form issued together with the tax management guidance document (form 20-DK-TH-TCT Download issued with Circular 105/2020/TT-BTC) and submit two (02) copies to the organization, individual paying income as a basis for calculating deduction for dependants.

- The organization or individual paying income retains one (01) copy and submits one (01) copy to the tax authority directly managing it at the same time as submitting the personal income tax declaration of the tax declaration period as per tax management law.

For individuals directly declaring tax with the tax authority, the individual submits one (01) copy of the dependant registration form according to the form issued with the tax management guidance document (form 20-DK-TH-TCT Download issued with Circular 105/2020/TT-BTC) to the tax authority directly managing the income-paying organization at the same time as submitting the personal income tax declaration of the tax declaration period as per the Law on Tax Administration.