Shall a person receiving pension be registered as a dependant for personal exemption purposes in Vietnam?

Shall a person receiving pension be registered as a dependant for personal exemption purposes in Vietnam?

Pursuant to point d and point đ, clause 1, Article 9 of Circular 111/2013/TT-BTC regulating dependants as follows:

Deductions

1. personal exemption

...

d) dependants include:

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

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

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

d.1.2) Children 18 years of age or older with disabilities who cannot work.

d.1.3) Children studying in Vietnam or abroad at the university, college, professional secondary, vocational levels, including children 18 years old or older studying in high school (including the time waiting for university exam results from June to September of grade 12) without income or with an average monthly income in the year from all sources not exceeding 1,000,000 VND

d.2) The spouse of the taxpayer meeting the conditions at point đ, clause 1, of this Article.

d.3) Biological parents; parents-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, of this Article.

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

d.4.1) Brothers and sisters of the taxpayer.

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

d.4.3) Nephews and nieces of the taxpayer including: children of brothers, sisters, siblings.

d.4.4) Other individuals directly supported as per legal regulations.

dd) An individual counted as dependant according to the guidance at sub-items d.2, d.3, d.4, point d, clause 1, of this Article must satisfy the following conditions:

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

dd.1.1) With disabilities, unable to work.

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

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

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Thus, a dependant of a personal income tax (PIT) taxpayer who is receiving a pension can still be registered for the personal exemption if the total pension received and other average monthly income in the year does not exceed 1,000,000 VND.

Shall a person receiving pension be registered as a dependant for personal exemption purposes in Vietnam? (Image from the Internet)

What are principles for personal exemption for dependants of PIT taxpayers in Vietnam?

Based on sub-item c.2, point c, clause 1, Article 9 of Circular 111/2013/TT-BTC, the principles for personal exemption for dependants of PIT taxpayers are as follows:

- Taxpayers can calculate the personal exemption for dependants if the taxpayer has completed taxpayer registration and has been issued a tax identification number.

- When taxpayers register for personal exemption for dependants, the tax authority will issue a tax identification number for the dependant and temporarily calculate the personal exemption in the year from the time of registration. For dependants registered for deduction before Circular 111/2013/TT-BTC became effective, they continue to receive personal exemptions until they are issued a tax identification number.

- If the taxpayer has not calculated the personal exemption for dependants within the tax year, they can calculate the deduction from the month the obligation to provide support arises when the taxpayer finalizes taxes and registers for the personal exemption for dependants. Particularly for other dependants according to the guidance at sub-item d.4, point d, clause 1, Article 9 of Circular 111/2013/TT-BTC, the deadline for registration is no later than December 31 of the tax year; beyond this deadline, no deduction is allowed for that tax year.

- Each dependant is only calculated for deduction once to one taxpayer in the tax year. In cases where multiple taxpayers share the same dependant, the taxpayers must agree on the registration for personal exemption to one taxpayer.

What does the application for dependant registration of PIT taxpayers in Vietnam?

According to sub-item 3 of Section 3 Official Dispatch 883/TCT-DNNCN in 2022 of the General Department of Taxation guiding on personal income tax finalization, the documents for personal exemption for dependants of PIT taxpayers include:

- For individuals submitting registration documents directly at the tax authority:

+ dependant registration form according to form number 07/DK-NPT-TNCN issued with Appendix 2 of Circular 80/2021/TT-BTC.

Download Form 07/DK-NPT-TNCN for dependant registration: Download

+ Documentation proving the dependant as guided at point g, Clause 1, Article 9 of Circular 111/2013/TT-BTC.

+ In the case of dependants directly supported by the taxpayer, confirmation from the People's Committee of the commune/ward where the dependant resides must be obtained according to form number 07/XN-NPT-TNCN issued with Appendix 2 of Circular 80/2021/TT-BTC.

Download Form 07/XN-NPT-TNCN declaration for directly supported individuals: Download

- If the individual registers for the personal exemption through an organization or individual providing income, they shall submit their registration documents as instructed in point a of sub-item 3 of Section 3 Official Dispatch 883/TCT-DNNCN in 2022 to the organization or individual paying the income. The organization or individual paying income compiles according to the Appendix Table Summary of Registration of dependants for personal exemption form number 07/THDK-NPT-TNCN issued with Appendix 2 of Circular 80/2021/TT-BTC and submits to the tax authority as required.

Download Form 07/THDK-NPT-TNCN Appendix Table Summary of Registration of dependants: Download