How many times may an dependant be counted for personal exemption for a taxpayer in Vietnam?

How many times may an dependant be counted for personal exemption for a taxpayer in Vietnam?

According to Clause 2, Article 19 of the Law on Personal Income Tax 2007, the personal exemption is stipulated as follows:

Personal exemption

1. personal exemption is the amount deducted from taxable income before calculating tax on income from business, salary, and wages for taxpayers who are resident individuals. The personal exemption consists of the following two parts:

a) Deduction for the taxpayer is 4 million VND/month (48 million VND/year);

b) Deduction for each dependant is 1.6 million VND/month.

2. The determination of personal exemption for dependants is based on the principle that each dependant is only deducted once against one taxpayer.

3. dependants are individuals that the taxpayer is responsible for supporting, including:

a) Minor children; children with disabilities, unable to work;

b) Individuals without income or with income not exceeding the prescribed level, including adult children who are currently studying at universities, colleges, professional secondary schools, or vocational schools; spouse unable to work; elderly parents or parents unable to work; other dependants without a place to live whom the taxpayer must directly care for.

The Government of Vietnam stipulates the income level and declaration to determine dependants eligible for personal exemption.

Thus, according to the above stipulations, an individual is entitled to a personal exemption for a dependant only once in a tax year. This means each dependant can only be deducted once against one taxpayer.

How many times may an dependant be counted for personal exemption for a taxpayer in Vietnam? (Image from the Internet)

When may taxpayers make deductions for their dependants in Vietnam?

According to point c, Clause 1, Article 9 of Circular 111/2013/TT-BTC, the contents related to personal income tax for individuals doing business in this Article were repealed by Clause 6, Article 25 of Circular 92/2015/TT-BTC, stipulating the deductions as follows:

Deductions

Deductions as guided in this Article are amounts deducted from the taxable income of individuals before determining taxable income from salary, wages, and business. To be specific:

1. personal exemption

According to the provisions of Article 19 of the Personal Income Tax Law; Clause 4, Article 1 of the Law amending and supplementing a number of articles of the Personal Income Tax Law; Article 12 of Decree No. 65/2013/ND-CP, the personal exemption is implemented as follows:

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c) Principle for determining personal exemption

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c.2) personal exemption for dependants

c.2.1) Taxpayers are eligible for personal exemption for dependants if the taxpayer has taxpayer registration and is assigned a tax identification number.

c.2.2) When the taxpayer registers for personal exemption for dependants, the tax authority will grant a tax identification number for the dependant and temporarily calculate personal exemption for the year from the registration time. For those dependants registered for personal exemption before the effective date of this Circular, the deduction continues until the tax identification number is assigned.

c.2.3) In cases where the taxpayer has not applied personal exemption for dependants in the tax year, the deduction is applied from the month the obligation to support arises when the taxpayer completes the tax finalization and registers for personal exemption for dependants. Specifically for other dependants under the guidance at section d.4, point d, clause 1, this Article, the registration deadline for personal exemption is no later than December 31 of the tax year; after this deadline, no personal exemption is granted for that tax year.

c.2.4) Each dependant can only be deducted once against one taxpayer in a tax year. In cases where multiple taxpayers share a common dependant to support, the taxpayers themselves must agree on which person will register the personal exemption.

d) dependants include:

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

d.1.1) Children under 18 years old (calculated by full month).

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Thus, according to the above regulations, taxpayers are eligible for personal exemption for dependants if the taxpayer has taxpayer registration and is assigned a tax identification number.

What is the personal exemption amount for dependants in Vietnam in 2024?

According to the stipulations in Article 19 of the Law on Personal Income Tax 2007, amended by Clause 4, Article 1 of the 2012 Revised Personal Income Tax Law, Article 1 of Resolution 954/2020/UBTVQH14 (relating to determining tax for business individuals in Clause 1 of this Article repealed by Clause 4, Article 6 of the 2014 Law on Amendments to Tax Laws), the personal exemption for each dependant is 4.4 million VND/month.