What is the maximum number of dependents to be registered for personal deduction by a taxpayer in Vietnam?

What is the definition of personal deduction in PIT calculation in Vietnam?

Under Clause 1, Article 19 of the Personal Income Tax Law 2007, amended by Clause 4, Article 1 of the Law on Amendments to Personal Income Tax Law 2012:

Personal deduction

1. Personal deduction means a sum of money deductible from pre-tax income from business, salary or wage of a resident taxpayer. Personal deduction consists of the following two parts:

a) Deduction for the taxpayer, which is VND 9 million/month (VND 108 million/year);

b) Deduction for each dependant of the taxpayer, which is VND 3.6 million/month.

In case the Consumer Price Index (CPI) changes over 20% compared to the effective time of the Law or the latest time point of adjusting the Personal deduction, the Government submits to the Standing committee of the National Assembly for adjustment of the Personal deduction specified in this clause in conformity with changes of price in order to apply for the next tax term.​

...

3. Dependants of a taxpayer means persons a taxpayer is responsible for nurturing or taking care of, including:

a/ His/her minor children or disabled children who are incapable of working;

b/ Individuals who have no income or have incomes not exceeding the prescribed level, including adult children who are studying at a university, college, professional secondary school or job-training establishment; his/her spouse who is incapable of working; his/her parents who are beyond the working age or incapable of working; other supportless persons whom the taxpayer has to directly nurture.

The Government shall specify the income level and declaration for identification of dependants to be counted for Personal deduction.

Thus, personal deduction means a sum of money deductible from pre-tax income from business, salary or wage of a resident taxpayer.

What is the maximum number of dependents to be registered for personal deduction by a taxpayer in Vietnam? (Image from the Internet)

What is the maximum number of dependents to be registered for personal deduction by a taxpayer in Vietnam?

Under Point c, Clause 1, Article 9 of Circular 111/2013/TT-BTC:

Deductions

The deductions guided in this Article are the amounts deducted from the taxable income of the person before calculating taxable income from wages, remunerations, and business. In particular:

...

c) Principles for personal deduction

...

c.2) Deduction for dependants

c.2.1) The taxpayer may make deductions for his or her dependants if the taxpayer has applied for tax registration and been issued with the tax code.

c.2.2) When registering deductions for dependants, the taxpayer shall be issued with tax codes for dependants and make preliminary deductions in the year from the registration date. The dependants that are registered before this Circular takes effect are still eligible for deductions until being issued with tax codes.

c.2.3) If the taxpayer has not made deductions for dependants in the tax year, the deductions for dependants shall be made from the month in which the custody is given when the taxpayer settles tax and registers deductions for dependants. Deductions for other dependants, who are defined in Point d.4 Clause of this Article, must be registered by December 31 of the tax year, otherwise the deduction for the whole tax year shall not be made.

c.2.4) The deduction for a dependant shall apply to only one taxpayer in the tax year. Where multiple taxpayers have the same dependant to provide for, they shall reach an agreement on the person that makes the deduction for such dependant.

...

Thus, the law does not limit the number of dependents to be registered for personal deduction by a taxpayer. However, the deduction for a dependant shall apply to only one taxpayer in the tax year.

What are the documents proving dependents being parents for personal deduction in Vietnam?

Under Point g.3, Clause 1, Article 9 of Circular 111/2013/TT-BTC, amended by Article 1 of Circular 79/2022/TT-BTC:

- Photocopies of ID cards or Citizen ID cards.

- Legitimate papers proving the relationship between the dependants and the taxpayer such as a photocopy of the written confirmation of residence or notice of personal identification number and citizen information in national population database or another paper issued by the police authority, certificates of birth, decisions on recognition of parent or child acknowledgement made by competent authorities.

In case of working age, other papers proving the dependant’s incapability of work are required, apart from the aforesaid papers, such as a photocopy of the Certificate of disability according to regulations of law on the disabled that are incapable of works, a photocopy of the medical record of the ill person incapable of work (suffering from AIDS, cancer, chronic kidney failure, etc.).