What are conditions for parents of taxpayers to be consideres as dependants in Vietnam?

What are conditions for parents of taxpayers to be consideres as dependants in Vietnam?

According to point d.2, clause 1, Article 9 of Circular 111/2013/TT-BTC (the content related to personal income tax for individual businesses is abolished by clause 6, Article 25 of Circular 92/2015/TT-BTC), the regulations are as follows:

Deductions

The deductions as guided in this Article are amounts that are subtracted from the taxable income of an individual before determining the taxable income from wages, salaries, and business. Specifically: as follows:

1. dependant deductions

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d) Individuals counted as dependants according to the guidance at sub-items d.2, d.3, and d.4 of point d, clause 1 of this Article must meet the following conditions:

d.1) For individuals in working age, they must simultaneously meet the following conditions:

d.1.1) Have a disability, unable to work.

d.1.2) Have no income or have an average monthly income in a year from all sources not exceeding 1,000,000 VND.

d.2) For individuals outside the working age, there must be no income or have an average monthly income in a year from all sources not exceeding 1,000,000 VND.

e) Disabled individuals, unable to work as guided at sub-item d.1.1, point d, clause 1, of this Article are those under the regulatory framework of the law on disabled persons, individuals with no ability to work due to illness (like AIDS, cancer, chronic kidney failure, etc.).

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Moreover, according to clause 1, Article 169 of the Labor Code 2019, the regulations on working age are as follows:

Retirement age

1. Employees who meet the conditions of social insurance contribution duration according to the social insurance law are entitled to pensions upon reaching the retirement age.

2. The retirement age of employees under normal working conditions will be adjusted according to a roadmap until reaching 62 years for males in 2028 and 60 years for females in 2035.

From the year 2021, the retirement age for employees under normal working conditions is 60 years and 3 months for males, and 55 years and 4 months for females, with an increase of 3 months for males and 4 months for females each year thereafter.

Thus, parents as dependants must meet the following conditions:

Firstly, if parents are dependants outside the working age, they must simultaneously meet two conditions:

- Parents must be outside the working age, specifically, the father over 60 years and 9 months, and the mother over 56 years in the year 2023 under normal working conditions.

- Parents must have no income or have an average monthly income in the year from all sources not exceeding 1,000,000 VND.

Secondly, if parents are dependants within the working age, they must simultaneously meet two conditions:

- Parents must have a disability, unable to work.

- Parents must have no income or have an average monthly income in the year from all sources not exceeding 1,000,000 VND.

What are conditions for parents of taxpayers to be consideres as dependants in Vietnam? (Image from the Internet)

What documents are required to prove that dependants are eligible for personal exemption in Vietnam?

According to the regulations in point g.3, clause 1, Article 9 of Circular 111/2013/TT-BTC (content related to personal income tax for individual businesses is abolished by clause 6, Article 25 of Circular 92/2015/TT-BTC), the proof documents for dependant parents eligible for personal exemption include the following papers:

- Photocopy of the identity card.

- Legal papers to determine the relationship of the dependant with the taxpayer such as a photocopy of the household register (if they share the same household registration), birth certificate, decision recognizing the acceptance of parent-child relationship by a competent state agency.

In case of being within the working age, besides the above papers, the proof documents should include additional papers proving disability, inability to work such as a photocopy of the Disability Certification according to the law on people with disabilities for the disabled who are unable to work, photocopy of medical records for those with diseases that render them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).

What is the procedure for personal exemption for parents of taxpayers in Vietnam?

To apply for personal exemptions for parents (dependants), taxpayers need to follow the guidance in clause 10, Article 7 of Circular 105/2020/TT-BTC. Specifically:

(1) In case the individual authorizes the income-paying organization for taxpayer registration for the dependant, submit the taxpayer registration dossier at the income-paying organization.

The taxpayer registration dossier for dependants includes: A Power of Attorney and dependant's papers (a copy of the Citizen Identity Card or a copy of the valid Identity Card for dependants with Vietnamese nationality from 14 years and above; a copy of the Birth Certificate or a valid Passport for dependants with Vietnamese nationality under 14 years; a copy of the Passport for dependants who are foreign nationals or Vietnamese nationals residing abroad).

The income-paying organization consolidates and submits the Taxpayer Registration Declaration Form No. 20-DK-TH-TCT issued together with Circular 105/2020/TT-BTC to the tax authority directly managing the income-paying organization.

(2) In case the individual does not authorize the income-paying organization for taxpayer registration for the dependant, submit the taxpayer registration dossier to the respective tax authority as stipulated in Clause 9, Article 7 of Circular 105/2020/TT-BTC. The taxpayer registration dossier includes:

- The Taxpayer Registration Declaration Form No. 20-DK-TCT issued together with Circular 105/2020/TT-BTC.

- A copy of the Citizen Identity Card or a copy of the valid Identity Card for dependants with Vietnamese nationality from 14 years and above; a copy of the Birth Certificate or valid Passport for dependants with Vietnamese nationality under 14 years; a copy of the valid Passport for dependants who are foreign nationals or Vietnamese nationals residing abroad.

In case an individual is obliged to pay personal income tax and has submitted a registration dossier for dependants to apply for personal exemption before Circular No. 95/2016/TT-BTC dated June 28, 2016, of the Ministry of Finance comes into effect but has not registered a taxpayer code for dependants, then submit the taxpayer registration dossier as stated in this Clause to be granted a taxpayer code for dependants.

What is the personal exemption rate in Vietnam for 2024?

personal exemption includes: deduction for the taxpayer and deduction for dependants.

Based on Article 1 of Resolution 954/2020/UBTVQH14, as follows:

- The deduction rate for taxpayers is 11 million VND/month (132 million VND/year);

- The deduction rate for each dependant is 4.4 million VND/month.