What is the personal exemption in Vietnam in 2025?

What is the personal exemption in Vietnam in 2025?

Pursuant to Article 19 of the Law on Personal Income Tax 2007, as amended by Clause 4, Article 1 of the Law on Amendments to the Personal Income Tax 2012, Article 1 of Resolution 954/2020/UBTVQH14 (The provisions related to tax determination for individual businesses under Clause 1 of this Article were abolished by Clause 4, Article 6 of the Law on Amendments to Tax Laws 2014), the personal exemption is the amount deducted from taxable income before calculating tax on income from business, salaries, wages for taxpayers who are resident individuals.

The personal exemption for 2025 is determined according to Article 1 of Resolution 954/2020/UBTVQH14 as follows:

Personal exemption

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

1. The reduction amount for taxpayers is 11 million VND/month (132 million VND/year);

2. The reduction amount for each dependant is 4.4 million VND/month.

The personal exemption for taxpayers in 2025 is 11 million VND/month (132 million VND/year) and 4.4 million VND/month for each dependant.

What is the personal exemption in Vietnam in 2025? (Image from Internet)

What are the principles for calculating personal exemptions for taxpayers in Vietnam?

The principles for calculating personal exemptions for taxpayers are determined according to subitem c.1, item c, Clause 1, Article 9 of Circular 111/2013/TT-BTC (The provisions related to personal income tax for individual businesses in this Article were abolished by Clause 6, Article 25 of Circular 92/2015/TT-BTC) as follows:

- Taxpayers with multiple sources of income from salaries, wages, must choose one location at one time (calculated monthly) to claim personal exemption for themselves.

- For foreigners who are resident individuals in Vietnam, personal exemption for themselves can be calculated from January or from the month they arrive in Vietnam if they arrive for the first time, until the month their labor contract ends and they leave Vietnam within the tax year (calculated monthly).

- In cases where in the tax year, individuals have not deducted for themselves or deducted for less than 12 months, they will be allowed full 12 months deduction during tax finalization as per regulations.

What are the principles for calculating personal exemptions for dependants in Vietnam?

The principles for calculating personal exemptions for dependants are determined according to subitem c.2, item c, Clause 1, Article 9 of Circular 111/2013/TT-BTC (The provisions related to personal income tax for individual businesses in this Article were abolished by Clause 6, Article 25 of Circular 92/2015/TT-BTC) as follows:

- Taxpayers are entitled to claim personal exemption for dependants if they have registered as taxpayers and have been issued a tax code.

- When taxpayers register for personal exemption for dependants, the tax authority will issue a tax code for the dependants allowing temporary deductions in the year from the registration date. For dependants registered before October 1, 2013, deductions will continue until a tax code is issued.

- In cases where taxpayers have not claimed personal exemption for dependants during the tax year, they can claim deductions from the month the dependency obligation arises during tax finalization with registration for dependants.

For other dependants as guided in subitem d.4, item d, Clause 1, Article 9 of Circular 111/2013/TT-BTC, the deadline for registration for personal exemption is December 31 of the tax year. Beyond this date, deductions are not applicable for that tax year.

Deductible Items

The deductible items as guided in this Article are amounts deducted from an individual's taxable income before determining taxable income from salaries, wages, and business activities. Specifically:

1. personal exemption

Pursuant to Article 19 of the Law on Personal Income Tax; Clause 4, Article 1 of the amended and supplemented Law on Personal Income Tax; Article 12 of Decree No. 65/2013/ND-CP, personal exemptions are carried out as follows:

...

d) dependants include:

...

d.4) Other individuals without a shelter whom the taxpayer is directly supporting and meet the conditions at point đ, Clause 1 of this Article, include:

d.4.1) Siblings of the taxpayer.

d.4.2) Paternal grandparents, maternal grandparents, maternal and paternal aunts, uncles, and uncles of the taxpayer.

d.4.3) The taxpayer's nephews or nieces, including children of the taxpayer's siblings.

d.4.4) Other individuals whom the taxpayer must directly support as per legal regulations.

...

- Each dependant can only be deducted once by one taxpayer in a tax year. In cases where multiple taxpayers have a common dependant to support, they must mutually agree to allow one taxpayer to claim the deduction.