Eligibility for Family Circumstance Deduction in Cases of Grandchildren Supporting Grandparents: Documentation for Dependent Proof

Is the grandchild supporting the paternal grandmother eligible for family circumstance deductions?

Based on Official Dispatch 4298/TCT-DNNCN of 2024 by the General Department of Taxation, which provides guidance on resolving queries about registering for family circumstance deductions for dependents, specifically the case of a grandchild supporting the paternal grandmother, as follows:

- Based on Clause 2, Article 104 of the Law on Marriage and Family 2014 which stipulates the rights and obligations of grandparents and grandchildren:

Rights and obligations of grandparents and grandchildren

1. Paternal and maternal grandparents have the right and obligation to care for, educate, and provide a good role model for their grandchildren; in cases where the grandchildren are minors, have lost civil act capacity, or are unable to work and do not have the assets to support themselves without a caretaker as stipulated in Article 105 of this Law, the paternal and maternal grandparents have the obligation to raise their grandchildren.

2. Grandchildren have the obligation to respect, care for, and support paternal and maternal grandparents; in cases where the grandparents do not have children to support them, adult grandchildren have the obligation to support them.

Based on point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC on principles for calculating family circumstance deductions:

Deductions

Deductions as guided in this Article are amounts deducted from an individual's taxable income before determining taxable income from salaries, wages, and business activities. Specifically as follows:

1. Family circumstance deductions

According to the regulations in Article 19 of the Law on Personal Income Tax; Clause 4, Article 1 of the Law on Amendments and Supplements to a Number of Articles of the Law on Personal Income Tax; Article 12 of Decree No. 65/2013/ND-CP, family circumstance deductions are implemented as follows:

...

d) Dependents include:

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

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

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

d.1.2) Children over 18 years of age with disabilities, unable to work.

d.1.3) Children studying in Vietnam or abroad at the levels of university, college, professional secondary school, vocational training, including children over 18 years old studying in high school (including the time waiting for university exam results from June to September of 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 conditions at point đ, clause 1, this Article.

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

d.4) Other individuals with no place of refuge whom the taxpayer must directly support and meet the conditions at point đ, clause 1, this Article, including:

d.4.1) Siblings of the taxpayer.

d.4.2) Paternal grandparents, maternal grandparents; uncles, aunts, uncles, aunts of the taxpayer.

d.4.3) Nephews/nieces of the taxpayer including: children of siblings.

d.4.4) Other persons that need direct support as prescribed by law.

From the above regulations, it can be observed that if the grandchild is directly supporting the paternal grandmother and meets the conditions in Clause 2, Article 104 of the Law on Marriage and Family 2014, it is possible to register for family circumstance deductions for the dependent in accordance with legal provisions.

Is the grandchild supporting the paternal grandmother eligible for family circumstance deductions? What documents are required to prove dependence? (Image from the Internet)

What documents are required to prove dependence?

Documents required to prove dependence are stipulated at point g, clause 1, Article 9 of Circular 111/2013/TT-BTC as amended and supplemented by Article 1 of Circular 79/2022/TT-BTC as follows:

(1) A copy of the Identity Card or Citizen Card or Birth Certificate.

(2) Legal documents to determine the responsibility for support according to the law.

If the dependent is of working age, in addition to the above-mentioned documents, the proof of dependency must include additional documents proving incapacity to work, such as a copy of the Disability Certificate in accordance with the laws on people with disabilities for those unable to work, or a copy of the medical record for those with illnesses that incapacitate them (such as AIDS, cancer, chronic kidney failure, etc.).

Legal documents specified in point (2) are any legal documentation that identifies the relationship of the taxpayer with the dependent, such as:

- A copy of documents determining the obligation of support according to the law (if any).

- A copy of the Residence Information Confirmation or Notification of National ID and information in the National Population Database or other documents issued by the Police Department.

- A self-declaration by the taxpayer according to the form issued with Circular 80/2021/TT-BTC with confirmation from the People's Committee of the commune where the taxpayer resides about the dependent living with them.

- A self-declaration by the taxpayer according to the form issued with Circular 80/2021/TT-BTC with confirmation from the People's Committee of the commune where the dependent is residing, confirming that the dependent is currently residing in the locality and does not have a caretaker (in case they do not live together).

What is the family circumstance deduction for dependents?

According to Clause 1, Article 19 of the Law on Personal Income Tax 2007 as amended by Article 1 of Resolution 954/2020/UBTVQH14, family circumstance deductions are amounts deducted from taxable income before calculating taxes on income from business, wages, or salaries for resident individual taxpayers. Family circumstance deductions comprise two parts as follows:

- Deduction for taxpayer: 11 million VND/month (132 million VND/year);

- Deduction for each dependent: 4.4 million VND/month.

Therefore, the current family circumstance deduction for each dependent is 4.4 million VND/month/person.