Vietnam: How many dependents may e teacher register for personal deduction?

Who are dependents in Vietnam?

According to the provisions at point d, clause 1, Article 9 of Circular 111/2013/TT-BTC, which have been annulled by clause 6, Article 25 of Circular 92/2015/TT-BTC, dependents include:

Children: Children, legitimate adopted children, illegitimate children, stepchildren.

- Children under 18 years old (calculated by full months).

- Children 18 years old and older who are disabled and incapable of working.

- Children studying in Vietnam or overseas in universities, colleges, or vocational schools, including children from 18 years of age and over in high schools (including the period awaiting university enrolment results from June to September in 12th grade) that have no income or have the average monthly income of ≤ 1.000.000 VND in the year from all sources.

Spouse of the taxpayer.

- For individuals within working age, the following conditions must be met simultaneously:

+ Being disabled and incapable of working.

+ Having no income or having an average monthly income in the year from all sources not exceeding 1 million VND.

- Individuals outside working age must have no income or have an average monthly income in the year from all sources not exceeding 1 million VND.

Biological parents; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; legal adoptive parents.

- For individuals within working age, the following conditions must be met simultaneously:

+ Being disabled and incapable of working.

+ Having no income or having an average monthly income in the year from all sources not exceeding 1 million VND.

- Individuals outside working age must have no income or have an average monthly income in the year from all sources not exceeding 1 million VND.

Other individuals include:

- Sibling of the taxpayer.

- Paternal grandfather, paternal grandmother; maternal grandfather, maternal grandmother; aunt, uncle of the taxpayer.

- Nephew or niece of the taxpayer including Children of siblings.

- Other persons directly supported under the law.

How many dependents may a teacher in Vietnam register for personal deduction? (Image from the Internet)

How many dependents may a teacher in Vietnam register for personal deduction?

According to the provisions of Resolution 954/2020/UBTVQH14, personal deduction includes two parts:  deduction for taxpayer and deduction for each dependent. Taxpayers in general, and teachers in particular, are unequivocally entitled to personal deduction for themselves when calculating personal income tax. Currently, there is no regulation limiting the maximum number of dependents that can be registered for personal deduction.

Under point c, clause 1, Article 9 of Circular 111/2013/TT-BTC, which has been annulled by clause 6, Article 25 of Circular 92/2015/TT-BTC, the principle of personal deduction calculation is as follows:

- The taxpayer, who has income from wages and salaries, is naturally entitled to the personal deduction;

- The taxpayer is entitled to personal deduction for dependents when the taxpayer has completed taxpayer registration and has been issued a TIN.

- Each dependent is only calculated for a personal deduction once in a tax year. In case multiple taxpayers share the same dependent, they must agree to register the personal deduction for one taxpayer.

Thus, the current Vietnamese law does not limit the number of dependents for a taxpayer in general or teacher in particular, as long as the dependent is eligible for deduction and meets the corresponding conditions as prescribed, the personal deduction will be applied.

What are the personal deductions for teachers in Vietam?

The current personal deductions shall follow Resolution 954/2020/UBTVQH14:

- The deduction for taxpayer is 11 million VND/month (equivalent to 132 million VND/year);

- The deduction for each dependent is 4.4 million VND/month.

What are the procedures for registration of dependents by teachers in Vietnam?

According to the provisions in Article 3 of the Personal Income Tax Law 2007, when teachers generate income from wages and salaries, they are also subject to personal income tax.

Under Section 1, Part 2 of the Administrative Procedures amended and supplemented in the Taxation and Customs sector issued together with Decision 40/QD-BTC in 2023, the procedures for registration of dependents for personal deduction for individuals earning income from wages and salaries are regulated as follows:

Step 1: Register and submit documents proving dependents

- Register dependents:

Case (1): The taxpayer submits the initial application for registration of dependents for personal deduction for the entire period of deduction calculation to the income payer (if the taxpayer files through the income payer) no later than the tax declaration deadline (or prior to submitting the tax finalization application of the income payer according to the provisions of the Law on Tax Administration 2019).

The income payer retains one (01) application and submits one (01) application to the directly managing Tax authority at the same time as the personal income tax (PIT) declaration of the tax period (or when submitting the PIT finalization application according to the provisions of the Law on Tax Administration 2019).

Case (2): The taxpayer directly declares tax with the tax authority, and submits the application for registration of dependents to the directly managing Tax authority at the same time as the personal income tax declaration of the tax period according to the provisions of the Law on Tax Administration 2019 or when submitting the tax finalization application as prescribed.

Specifically, for other dependents (e.g., siblings, grandparents, aunts, uncles...), according to the guidelines in sub-item d.4, point d, clause 1, Article 9 of Circular 111/2013/TT-BTC dated August 15, 2013, of the Ministry of Finance, the latest deadline for personal deduction registration is December 31 of the tax year.

During the personal deduction period, if there are changes (increase/decrease) in dependents or changes in workplaces, the taxpayer must re-register dependents (applications, deadlines, steps, procedures as initial dependent registration).

- Submit proof of dependents: No later than 03 months from the date of initial dependent registration, the taxpayer prepares an application proving dependents according to the guidelines in Article 1 of Circular 79/2022/TT-BTC and sends it to the income payer or the tax authority (where the initial dependent registration form was submitted).

During the personal deduction period, if there are changes (increase/decrease) in dependents or changes in workplaces, the taxpayer must re-submit proof of dependents (applications, steps, procedures as initial proof of dependents).

Step 2: Tax authority receives the application:

- In case the application is submitted directly to the tax authority or sent via postal service: the tax authority will receive and process the application as prescribed.

- In case the application is submitted through electronic transactions, the receipt, inspection, acceptance, and processing of the application (and return of results if any) will be done through the electronic data processing system of the tax authority.