Is it necessary to submit documentation proving dependants for children in Vietnam from 2024 onwards?

Is it necessary to submit documentation proving dependants for children in Vietnam from 2024 onwards?

According to the provisions at point g, clause 1, Article 9 of Circular 111/2013/TT-BTC, as amended by Article 1 of Circular 79/2022/TT-BTC, the documentation for proving dependants who are children of the taxpayer includes:

Deductions

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g) Documentation proving dependants

g.1) For children:

g.1.1) Children under 18: Documentation includes a copy of the Birth Certificate and a copy of the Identity Card or Citizen Identification Card (if any).

g.1.2) Children aged 18 and above who are disabled and incapable of working, documentation includes:

g.1.2.1) A copy of the Birth Certificate and a copy of the Identity Card or Citizen Identification Card (if any).

g.1.2.2) A copy of the Disability Certificate according to the law on persons with disabilities.

g.1.3) Children studying at educational levels as guided in item d.1.3, point d, clause 1, of this Article, documentation includes:

g.1.3.1) A copy of the Birth Certificate.

g.1.3.2) A copy of the Student Card or a declaration with the school's confirmation, or other documents proving enrollment at universities, colleges, vocational schools, vocational training centers, high schools, or secondary schools.

g.1.4) In cases of adopted children, children born out of wedlock, or stepchildren, aside from the documents for each respective case mentioned above, additional documents are required to prove the relationship, such as a copy of the adoption recognition decision, or the recognition decision for receiving father, mother, or child from a competent state agency...

Also, at point g of Article 9 of Circular 111/2013/TT-BTC, as amended by Article 1 of Circular 79/2022/TT-BTC, the regulations on submitting documentation for proving dependants are as follows:

g.7) From the date the Tax Authority announces the completion of data connection with the National Database on Population, taxpayers are not required to submit the documentation proving dependants mentioned above if the information in these documents is already present in the National Database on Population.

From the two regulations above, it can be concluded that from 2024 onwards, individual income taxpayers will not need to submit documentation proving dependants for children, as the Tax Authority has completed the data connection with the National Database on Population. However, if any information in the documents mentioned above is not available in the National Database on Population, individual income taxpayers need to submit those specific documents separately.

Is it necessary to submit documentation proving dependants for children in Vietnam from 2024 onwards? How many dependants can a person have when calculating personal exemptions? (Image from the Internet)

Can multiple personal income taxpayers register personal exemptions for the same dependant in Vietnam?

At point c, clause 1, Article 9 of Circular 111/2013/TT-BTC, the regulations on dependant deductions are as follows:

- Each dependant is only allowed to be deducted once for one taxpayer in a tax year. In the case where multiple taxpayers have a common dependant to support, the taxpayers must mutually agree to register the personal exemption for a single taxpayer.

What are the penalties for duplicate dependant declarations in Vietnam?

According to Article 16 of Decree 125/2020/ND-CP on penalties for incorrect declarations:

Penalties for incorrect declarations leading to insufficient tax payment or unjustified increase in exempted, reduced, refunded tax

1. A fine of 20% of the under-declared tax amount or the higher exempted, reduced, refunded tax amount than regulated for any of the following acts:

a) Incorrectly declaring the tax calculation basis or deductible tax amounts, or incorrectly determining exempted, reduced, refunded cases leading to insufficient tax payment or increase in exempted, reduced, refunded tax, but the economic transactions have been fully reflected in the accounting system, lawful invoices, and documents;

b) Incorrectly declaring leading to a reduction in payable tax amount or increase in refundable, exempted, reduced tax amount not specified in point a of this clause, but the taxpayer voluntarily declared additional information and paid the missing tax amount into the state budget before the tax authority concludes the tax inspection at the taxpayer's premises;

c) Incorrectly declaring leading to a reduction in payable tax amount or an increase in refundable, exempted, reduced tax as determined by the inspection record or administrative violation record as tax evasion, but the taxpayer commits a first-time administrative violation on tax evasion, has supplemented the declaration, and paid the full tax amount into the state budget before the competent authority issues a penalty decision, and the tax authority has recorded it as an incorrect declaration resulting in tax insufficiency;

d) Incorrectly declaring leading to a reduction in payable tax amount or an increase in refunded, exempted, reduced tax for linked transactions, but the taxpayer has developed a market price determination dossier or has prepared and submitted necessary appendices to the tax authority as per the regulations on tax management for enterprises with linked transactions;

dd) Using unlawful invoices or documents to account for the value of goods and services purchased, leading to a reduction in payable tax amount or an increase in refunded, exempted, reduced tax, but when discovered by the tax authority during inspection, the purchaser proves that the violation in using unlawful invoices or documents belongs to the seller, and the purchaser has fully accounted as per regulations.

Based on the above regulation, in cases of duplicate dependant declarations for personal exemptions, leading to insufficient individual income tax declaration, a penalty of 20% will be imposed on the under-declared tax amount or higher exempted, reduced, refunded tax amount than provided by regulations.