Vietnam: May an personal income taxpayer receive personal deductions if their child is studying for a master's degree?

What are the principles for calculating personal deductions for personal income taxpayers in Vietnam?

Based on Point c Clause 1 Article 9 of Circular 111/2013/TT-BTC, the principles for calculating personal deductions for personal income taxpayers are stipulated as follows:

(1) Personal deductions for the taxpayer themselves

- If the taxpayer has multiple sources of income from salaries, wages, or business activities, they must choose to apply the personal deductions at one place for themselves at a given time (accounted for the full month).

- For foreigners residing in Vietnam, personal deductions can be calculated from January or from the month they arrive in Vietnam if the individual is present for the first time until the end of the employment contract and leaves Vietnam within the tax year (accounted for the full month).

- In cases where the taxpayer has not applied personal deductions for themselves or has applied deductions for less than 12 months within the tax year, they are entitled to apply a full 12-month deduction when finalizing taxes according to regulations.

(2) Personal deductions for dependents

- Taxpayers are entitled to apply personal deductions for dependents if they have registered as a taxpayer and have been issued a tax identification number.

- When taxpayers register for personal deductions for dependents, the tax authorities will issue a tax identification number for the dependents, allowing for temporary deductions within the year starting from the registration. Dependents registered for deductions before the Circular 111/2013/TT-BTC came into effect will continue to receive deductions until a tax identification number is issued.

- If the taxpayer has not calculated personal deductions for dependents within the tax year, they are allowed to calculate deductions starting from the month of supporting obligation when finalizing taxes and registering for deductions for dependents. For other dependents as guided at Subsection d.4 Point d Clause 1 Article 9 of Circular 111/2013/TT-BTC, the deadline to register for deductions is December 31 of the tax year, beyond which deductions cannot be applied for that tax year.

- Each dependent is only allowed one deduction against one taxpayer in the tax year. If multiple taxpayers share a dependent, they must mutually decide which taxpayer will register the personal deduction.

Vietnam: May an personal income taxpayer receive personal deductions if their child is studying for a master's degree?

Based on Point d Clause 1 Article 9 of Circular 111/2013/TT-BTC regarding dependents, the stipulation is as follows:

Deductions

1. Personal Deductions

...

d) Dependents include:

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

d.1.1) Children under 18 years old (calculated monthly).

Example 10: Mr. H’s child born on July 25, 2014, is considered a dependent from July 2014.

d.1.2) Children from 18 years old and above with disabilities, unable to work.

d.1.3) Children studying in Vietnam or abroad at higher education levels including university, college, vocational school, or children from 18 years old studying at high school level (including waiting period for university exam results from June to September of 12th grade) without income or monthly average income from all sources not exceeding 1,000,000 VND.

d.2) Spouse of the taxpayer meeting conditions at Point e, Clause 1, of this Article.

d.3) Biological parents; parents-in-law (or parents-in-law); stepfather, stepmother; or legal adoptive parents of the taxpayer meeting conditions at Point e, Clause 1, of this Article.

d.4) Other individuals with no support elsewhere whom the taxpayer is directly caring for and meeting conditions at Point e, Clause 1, of this Article, including:

d.4.1) Siblings of the taxpayer.

d.4.2) Grandparents, aunt, uncle of the taxpayer.

d.4.3) Nephews and nieces of the taxpayer.

d.4.4) Other caretakers as per legal regulations.

...

Therefore, the child of an personal income taxpayer studying for a master's degree is not considered a dependent under these regulations, and thus the taxpayer cannot receive personal deductions in this case.

Vietnam: May an personal income taxpayer receive personal deductions if their child is studying for a master's degree? (Image from Internet)

What is the personal deduction level for personal income taxpayers in Vietnam?

Based on Article 1 of Resolution 954/2020/UBTVQH14, the personal deduction level is stipulated as follows:

Personal deduction levels

Adjust the personal deduction levels specified in Clause 1 Article 19 of the Personal Income Tax Law No. 04/2007/QH12, amended and supplemented by Law No. 26/2012/QH13 as follows:

1. The deduction level for taxpayers is 11 million VND/month (132 million VND/year).

2. The deduction level for each dependent is 4.4 million VND/month.

Therefore, the personal deduction level for personal income taxpayers is determined as follows:

- For the taxpayer themselves: 11 million VND/month.

- For dependents (if any): 4.4 million VND/month per dependent, increasing incrementally with the number of dependents.