Can a grandchild not a helpless individual be considered a dependant to calculate exemption in Vietnam?
What are the changes for exemption in 2022 of Vietnam?
Pursuant to Article 1 of Resolution 954/2020/UBTVQH14 on the exemption in 2022 as follows:
Article 1. Exemptions
The exemptions specified in Clause 1 Article 19 of the Law on Personal Income Tax No. 04/2007/QH12, amended by Law No. 26/2012/QH13, are changed as follows:
1. Personal exemption: 11 million VND/month (132 million VND/year);
2. Dependent exemption: 4,4 million VND/dependent/month.
Thus, the exemption in 2022 will not change compared to 2021.
What does the application for exemption in Vietnam include?
Pursuant to Article 9 of Circular 111/2013/TT-BTC (amended by Clause 6, Article 25 of Circular 92/2015/TT-BTC) on the application for exemption as follows:
- For individuals submitting directly the application for registration of dependents at the tax authorities, the application includes:
+ A copy of the dependent registration form using form No. 07/DK-NPT-TNCN issued together with Appendix II of Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
+ Dossier proving dependents as guided at Point g, Clause 1, Article 9 of Circular 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.
+ In case the dependent is directly raised by the taxpayer, it must be certified by the People's Committee of the commune/ward where the dependent resides, using form No. 07/XN-NPT-TNCN attached to Appendix II to this Circular. Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.
- In case an individual registers the exemption for dependents through an income-paying organization or individual, the individual shall submit the application for dependent registration under the guidance at Point a, Clause 3, Section III of this Official Dispatch. Income-paying organizations and individuals shall synthetize according to the Appendix II of the Circular No. BTC dated September 29, 2021 by the Ministry of Finance and submit to the tax authority as prescribed.
Who do the dependants for exemption in Vietnam include?
Pursuant to Clause 1, Article 9 of Circular 111/2013/TT-BTC (amended by Clause 6, Article 25 of Circular 92/2015/TT-BTC) on dependants as follows:
Article 9. 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:
1. Personal deductions
…
d) Dependants include:
d.1) Children, legitimate adopted children, illegitimate children, stepchildren. To be specific:
…
d.2) The taxpayer's spouse that meet the conditions in Point dd Clause 1 of this Article.
d.3) The taxpayer’s parents, parents-in-law, stepparents, legitimate adoptive parents that meet the conditions in Point dd Clause 1 of this Article.
d.4) Other dependants that the taxpayer has to provide for, who meet the conditions in Point dd Clause 1 of this Article, including:
d.4.1) The taxpayer’s brothers and sisters.
d.4.2) The taxpayer’s grandparents, aunts, uncles.
d.4.3) The taxpayer’s nieces and nephews.
d.4.4) Other people to provide for as prescribed by law.
dd) A person that meet the conditions below shall be considered a dependant mentioned in Point d.2, d.3, d.4 Clause 1 of this Article:
đ.1) The person of working age must meet all conditions below:
dd.1.1) The person is disabled and incapable of work.
dd.1.2) The person has no income or his average monthly income from all sources does not exceed 1,000,000 VND.
dd.2) The people outside working age that have no income or their average monthly income from all sources does not exceed 1,000,000 VND.
e) The disabled that are incapable of work mentioned in Point dd.1.1 Clause 1of this Article are the people regulated by regulations of law on the disabled and ill people incapable of works (sufferers from AIDS, cancer, chronic kidney failure, etc.)"
Thus, according to Official Dispatch 18175/CTHN-TTHT dated April 26, 2022 and the above regulations, in case the employee registers the dependent as a biological grandchild (the child's parents are of working age) not a helpless individual directly nurtured by the taxpayer according to the provisions of law is not eligible for examption when calculating PIT as prescribed in Clause 1, Article 9 of Circular No. 111/2013/TT-BTC of the Ministry of Finance.
In case an employee registers dependents as paternal grandparents, maternal grandparents helpless individuals that the taxpayer is directly raising and satisfying the conditions at Point dd, Clause 1, Article 9. Circular No. 111/2013/TT-BTC of the Ministry of Finance is eligible for exemption when calculating PIT according to regulations.
Thus, in the process of implementing tax policies, if there are still issues, the unit can refer to the guiding documents of the Hanoi Tax Department posted on the website http://hanoi.gdt.gov. vn or contact the Department of Inspection No. 2 for assistance in resolving.
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