Is a deduction for dependants applicable for an illegitimate child in Vietnam?

Is a deduction for dependants applicable for an illegitimate child in Vietnam?

Based on the provisions set forth in point d, clause 1, Article 9 of Circular 111/2013/TT-BTC (Contents related to personal income tax for individuals doing business in this Article are annulled by clause 6, Article 25 of Circular 92/2015/TT-BTC), taxpayers may register dependants who are illegitimate children if they fall into one of the following three categories:

- Children under 18 years old (calculated by the full month).

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

- Children aged 18 or over with disabilities, unable to work.

- Children studying in Vietnam or abroad at the university, college, professional secondary, vocational levels, including children 18 years old or older studying at the high school level (including the period while waiting for university exam results from June to September in grade 12) who have no income or have an average monthly income in the year from all sources that does not exceed 1,000,000 VND.

Is a deduction for dependants applicable for an illegitimate child in Vietnam? (Image from the Internet)

What documents are required to apply for a deduction for an illegitimate child in Vietnam?

The required documents for an application for a deduction for an illegitimate child are stipulated at point g, clause 1, Article 9 of Circular 111/2013/TT-BTC, amended by Article 1 of Circular 79/2022/TT-BTC as follows:

* For children under 18 years old (calculated by the full month):

Documents to prove include:

- Copy of Birth Certificate;

- Copy of ID Card or Citizen Identification Card (if available).

* For children over 18 years old with disabilities, unable to work:

Documents to prove include:

+ Copy of Birth Certificate and copy of ID Card or Citizen Identification Card (if available).

+ Copy of Disability Certification according to the law on persons with disabilities.

* For children studying in Vietnam or abroad at the university, college, professional secondary, vocational levels, including children 18 years old or older studying at the high school level (including the period while waiting for university exam results from June to September in grade 12), who have no income or have an average monthly income in the year from all sources that does not exceed 1,000,000 VND:

Documents to prove include:

+ Copy of Birth Certificate.

+ Copy of Student Card or affidavit with school confirmation or other documents proving enrollment at universities, colleges, professional or high schools, or vocational training.

Note: In the case of illegitimate children, in addition to the documents required in each specified case above, verification documents must include additional papers to prove the relationship, such as: a copy of the decision recognizing adoption, the decision recognizing paternity, maternity, or relationship by a competent state agency...

When is the period for applying deduction for illegitimate children in Vietnam?

According to the provisions at point c, clause 1, Article 9 of Circular 111/2013/TT-BTC (Contents related to personal income tax for individuals doing business in this Article are annulled by clause 6, Article 25 of Circular 92/2015/TT-BTC) as follows:

Deductions

The deductions instructed in this Article are amounts deducted from the taxable income of individuals before determining the tax taxable income from salaries, wages, or business. Specifically, as follows:

1. dependant deductions

According to the provisions of Article 19 of the Law on Personal Income Tax; clause 4, Article 1 of the Law on amendments and supplements to certain articles of the Law on Personal Income Tax; Article 12 of Decree No. 65/2013/ND-CP, the dependant deduction is implemented as follows:

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c) Principle for calculating dependant deductions

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c.2) dependant deduction for dependants

c.2.1) Taxpayers are entitled to apply for dependant deductions if they have completed taxpayer registration and have been issued a tax code.

c.2.2) When taxpayers register deductions for dependants, the tax authority will issue a tax code for the dependant and allow a temporary deduction in the year from the time of registration. For dependants registered for deduction before this Circular took effect, the deduction continues until a tax code is issued.

c.2.3) If a taxpayer has not applied the dependant deduction for a dependant in the tax year, they are entitled to deductions from the month when the obligation to support arises upon finalizing taxes and registering the deduction for dependants. In the case of other dependants according to instructions at clause d.4, point d, clause 1, in this Article, the deadline for registering the dependant deduction is no later than December 31 of the tax year; beyond this date, the deduction will not be applicable for that tax year.

c.2.4) Each dependant is only accounted for one deduction in one taxpayer's account in the tax year. If several taxpayers have a common dependant, they have to decide among themselves which taxpayer will register for the dependant deduction.

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Based on the regulations, if the taxpayer has not applied a dependant deduction for the dependant in the tax year, they are eligible for deductions from the month the caregiving obligation arises when they finalize taxes and register the deduction for the dependant.