When must a taxpayer adjust for reductions in dependants on their personal income tax in Vietnam?

When must a taxpayer adjust for reductions in dependants on their personal income tax in Vietnam (PIT)?

Based on Points d and đ, Clause 1, Article 9 of Circular 111/2013/TT-BTC regulating dependants as follows:

Deductions

1. Family deduction

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d) Dependants include:

d.1) Child: biological, legally adopted child, illegitimate child, stepchild of the wife or husband, specifically includes:

d.1.1) Child under 18 years old (full counting by month).

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

d.1.2) Child 18 years or older with disabilities, unable to work.

d.1.3) Child studying in Vietnam or abroad at the university, college, professional secondary school, vocational level, including those 18 years or older studying at the high school level (including the period waiting for university exam results from June to September of grade 12) with no income or monthly average income from all sources not exceeding 1,000,000 VND.

d.2) The spouse of the taxpayer meeting the conditions specified at Point đ, Clause 1, of this Article.

d.3) The taxpayer's biological parents; parents-in-law (or parents of the husband or wife); stepparents; legal adoptive parents who meet the conditions specified at Point đ, Clause 1, of this Article.

d.4) Other individuals without support, whom the taxpayer must directly nurture, meeting the conditions at Point đ, Clause 1, of this Article, including:

d.4.1) Siblings of the taxpayer.

d.4.2) Grandparents, aunts, uncles of the taxpayer.

d.4.3) Nephews and nieces of the taxpayer, including children of the taxpayer's siblings.

d.4.4) Other directly nurtured individuals according to the law.

dd) Individuals considered dependants according to the instructions in d.2, d.3, d.4, Point d, Clause 1, must meet the following conditions:

dd.1) For persons of working age, they must meet the following conditions simultaneously:

dd.1.1) Disabled, unable to work.

dd.1.2) No income or monthly average income from all sources not exceeding 1,000,000 VND.

dd.2) For persons beyond working age, they must have no income or a monthly average income from all sources not exceeding 1,000,000 VND.

Therefore, a taxpayer must adjust for reductions in dependants when the dependant no longer meets the specified conditions, specifically:

- The dependant is over 18 years old, capable of working, and has an average income exceeding 1,000,000 VND.

- The dependant, who was unable to work, has recovered.

- The dependant is no longer being directly nurtured by the taxpayer.

When must a taxpayer adjust for reductions in dependants on their personal income tax in Vietnam? (Image from the Internet)

What are the regulations for adjusting reductions in dependants application in Vietnam?

Based on Clause 3, Article 10 of Circular 105/2020/TT-BTC regarding application for changing taxpayer registration information for taxpayers and dependants, the application for adjusting dependants is defined as follows:

- For cases submitted through the income-paying organization:

+ Authorization document (for cases where no prior authorization document is available for the income-paying organization).

+ Copies of documents with changed information related to the taxpayer registration of the individual or dependant.

The income-paying organization is responsible for compiling the change information of the individual or dependant into the taxpayer registration declaration form number 05-DK-TH-TCT or form number 20-DK-TH-TCT issued with Circular 105/2020/TT-BTC and submitting it to the tax authority directly managing the income-paying organization.

- For direct submissions to the tax authority:

+ Adjustment declaration form, supplementing taxpayer registration information form number 08-MST issued with Circular 105/2020/TT-BTC;

+ Copy of the Citizen Identity Card or copy of the still-valid Identity Card for dependants who are Vietnamese nationals; copy of the valid Passport for dependants who are foreign nationals or Vietnamese nationals residing abroad in cases where the taxpayer registration information on these documents has changed.

Vietnam: Where is the application for adjusting reductions in dependants submitted?

Based on Clause 3, Article 10 of Circular 105/2020/TT-BTC, the submission location for application on changing taxpayer registration information for taxpayers and dependants is as follows:

Location for submission and application of taxpayer registration information changes

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3. Taxpayers who are individuals as specified at Points k, l, n, Clause 2, Article 4 of this Circular and who have changes in their taxpayer registration information and their dependants (including changes in direct tax management) must submit their application to the income-paying organization or Tax Department, Regional Tax Department where the individual registers their permanent or temporary residence (in cases where individuals do not work at an income-paying organization) as follows:

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Thus, the submission location for application on adjustments for dependants is determined as follows:

- For cases where individuals authorize the income-paying organization: submit the application at the income-paying organization or the Regional Tax Department where the individual registers their permanent or temporary residence.

- For direct submissions to the tax authority: submit the application at the Regional Tax Department where the individual registers their permanent or temporary residence.