What is personal exemption in Vietnam? How to determine dependants for personal exemption in Vietnam?
What is personal exemption in Vietnam?
According to point a, clause 1, Article 9 of Circular 111/2023/TT-BTC, the regulation is as follows:
Personal exemption is the amount deducted from taxable income before tax calculation for income from business operations, salaries, and wages of residents who are taxpayers.
What is personal exemption in Vietnam? How to determine dependants for personal exemption in Vietnam? (Image from the Internet)
Vietnam: What do documents to prove dependants for personal exemption include?
Based on point g, clause 1, Article 9 of Circular 111/2013/TT-BTC, amended by Article 1 of Circular 79/2022/TT-BTC, the documents to prove dependants for personal exemption include:
* For children:
- Child under 18 years old: Documentation includes a photocopy of the birth certificate and a photocopy of the identity card or citizen identification card (if available).
- Child aged 18 years or older who is disabled and unable to work, documentation includes:
+ A photocopy of the birth certificate and a photocopy of the identity card or citizen identification card (if available).
+ A photocopy of the disability certification according to legal regulations on disabled persons.
- Child attending school at specific educational levels as guided in section d.1.3, point d, clause 1, Article 9 Circular 111/2013/TT-BTC, documentation includes:
+ A photocopy of the birth certificate.
+ A photocopy of the student card or a declaration confirmed by the school or other documents proving enrollment at universities, colleges, professional secondary schools, high schools, or vocational training.
- In the case of adoption, illegitimate children, or stepchildren, in addition to the documents required for each specific case mentioned above, other documents proving the relationship such as a photocopy of the adoption decision or the recognition of paternity/maternity by a competent state authority are needed.
* For spouse, documentation includes:
- A photocopy of the identity card or citizen identification card.
- A photocopy of the certificate of residence information or a notification of individual identification number and information from the national database on population or other documents issued by the police authority (proving the spousal relationship) or a photocopy of the marriage certificate.
In the case of a spouse within working age, in addition to the documents mentioned above, additional documents are required to prove the dependant is unable to work, such as a photocopy of the disability certification under legal regulations on disabled persons who cannot work, a photocopy of the medical record for individuals suffering from illnesses that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.).
* For biological parents, parents-in-law (or husband's parents), stepparents, legal adopters' documentation includes:
- A photocopy of the identity card or citizen identification card.
- Legal documents to determine the relationship of the dependant with the taxpayer, such as a photocopy of a certificate of residence information or a notification of individual identification number and information from the national database on population or other documents issued by the police authority, a birth certificate, an adoption decision by a competent state authority.
In the case of within working age, additional documents are required to prove disability, inability to work, such as a photocopy of the disability certification under legal regulations for disabled persons who cannot work, a photocopy of the medical record for those suffering from illnesses that preclude working (like AIDS, cancer, chronic kidney failure, etc.).
* For other individuals as guided in section d.4, point d, clause 1, Article 9 Circular 111/2013/TT-BTC, the documentation includes:
- A photocopy of the identity card or citizen identification card or birth certificate.
- Legal documents to determine the responsibility for fostering according to legal regulations.
In the case of dependants within working age, additional documents are necessary to prove inability to work, such as a photocopy of the disability certification under legal regulations on disabled persons who cannot work, a photocopy of the medical records for individuals with illnesses that prevent them from working (such as AIDS, cancer, chronic kidney failure, etc.).
Legal documents at section g.4.2, point g, clause 1, Article 9 Circular 111/2013/TT-BTC are any legal documents identifying the taxpayer's relationship with the dependant, such as:
- A photocopy of documents specifying the responsibility for fostering according to legal regulations (if any).
- A photocopy of the certificate of residence information or notification of individual identification number and information in the national database on population or other documents issued by the police authority.
- A self-declaration by the taxpayer according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP confirmed by the People's Committee of the commune where the taxpayer resides, confirming the dependant is living together.
- A self-declaration by the taxpayer according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP confirmed by the People's Committee of the commune where the dependant resides, confirming that the dependant currently resides locally and is not supported by anyone (in case of not living with the taxpayer).
* For foreign individuals residing in Vietnam:
If foreign-resident individuals do not have the dossiers as guided for specific cases mentioned above, they must have similar legal documents to serve as a basis for proving dependants.
* For taxpayers working in economic organizations, administrative bodies, or career professional bodies having parents, spouses (or husband), children, and other persons considered as dependants, who are clearly stated in the taxpayer's profile:
The documentation for proving dependants follows the guidance in sections g.1, g.2, g.3, g.4, g.5, point g, clause 1, Article 9 Circular 111/2013/TT-BTC, or merely requires the Declaration of dependant Registration according to the form issued with Circular 80/2021/TT-BTC and Decree 126/2020/ND-CP with the head of the unit's endorsement on the left side of the declaration.
The unit head is only responsible for the following content: name of the dependant person, year of birth, and relation to the taxpayer; other contents are declared and are the sole responsibility of the taxpayer.
Note: From the date the Tax Authority announces the completion of data connectivity with the National Database on Population, taxpayers are not required to submit the above-mentioned documentation proving dependants if the information in these documents is already in the National Database on Population.
How to determine dependants for personal exemption in Vietnam?
According to clause 3, Article 19 of Law on Personal Income Tax 2007, dependants are individuals whom the taxpayer is responsible for supporting, including:
- Minor children; children with disabilities, unable to work;
- Individuals with no income or income not exceeding a determined threshold, including adult children attending university, college, or professional secondary or vocational training; spouses unable to work; parents who are retired or unable to work; other unsupported individuals for whom the taxpayer must directly maintain support.
Additionally, as specified in point d, clause 1, Article 9 of Circular 111/2013/TT-BTC, dependants include:
[1] Children: biological children, legally adopted children, illegitimate children, wife’s stepchildren, husband’s stepchildren, specifically:
- Children under 18 years old (fully computed by month).
- Children aged 18 years or older who are disabled and unable to work.
- Children studying in Vietnam or abroad at university, college, professional secondary, vocational training, including children aged 18 years or older still attending high school (including the waiting period for university results from June to September in 12th grade), with no income or an average monthly income for the year from all sources not exceeding 1,000,000 VND.
[2] The spouse of the taxpayer
The taxpayer’s spouse is only considered a dependant if they meet the conditions specified in point đ, clause 1, Article 9 of Circular 111/2013/TT-BTC.
[3] Biological parents, parents-in-law (or husband’s parents); stepparents; legal adopters of the taxpayer who meet the conditions specified in point đ, clause 1, Article 9 of Circular 111/2013/TT-BTC.
[4] Other individuals without support and whom the taxpayer is obliged to directly care for and who meet the conditions specified in point đ, clause 1, Article 9 of Circular 111/2013/TT-BTC, including:
- Siblings of the taxpayer.
- Grandparents (paternal and maternal); uncles, aunts (paternal and maternal), of the taxpayer.
- Nephews and nieces of the taxpayer including: children of siblings.
- Other individuals that legally require direct sustenance by the taxpayer.
