How to register and submit supporting documents to prove dependents for tax deduction when changing workplaces in Vietnam?

How to register and submit supporting documents to prove dependents for tax deduction when changing workplaces in Vietnam?

Pursuant to Clause 1 Article 9 of the Circular 111/2013/TT-BTC (amended by Clause 6 Article 25 of the Circular 92/2015/TT-BTC) stipulating deductions as follows:

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

h) Declaration of deduction for dependants

h.1) The taxpayer that earns 09 million VND/month or less from business or wages might not register dependants.

h.2) The taxpayer that earns over 09 million VND/month from business and wages shall follow the procedure below to make deductions for dependants:

h.2.1) For taxpayers that earn incomes from wages:

h.2.1.1) Registration of dependants

h.2.1.1.1) First registration of dependants:

The taxpayer that earns income from wages shall submit 02 applications for dependant registration (using the form provided in guiding documents on tax administration) to the income payer as the basis for calculating deductions for dependants.

The income payer shall keep 01 application and submit 01 application to the local tax authority when submitting the personal income tax statement of that person in accordance with the Law on Tax administration.

The person that directly declares tax at the tax authority shall submit 01 application for dependant registration (using the form provided in guiding documents on tax administration) to the tax authority that monitors the income payer when submitting his declaration of personal income tax in accordance with the Law on Tax administration.

Official Dispatch 5054/TCT-DNNCN in 2023 provides guidance on tax deductions for dependents during the time the taxpayer is unemployed as follows:

When an individual taxpayer registers for a tax deduction for a dependent who has been assigned a taxpayer identification number by the tax authority, the deduction can be temporarily calculated for the year from the date of registration. If the taxpayer changes their place of employment, they must register and submit the supporting documents for the dependent as if they were registering the dependent for the first time as prescribed.

Therefore, if a taxpayer changes their place of employment, they must register their dependents to calculate the tax deduction for the entire time they work at the new company and submit the supporting documents for the dependent as if they were registering the dependent for the first time.

When registering a dependent for the first time, the taxpayer registers the dependent according to the prescribed form and submits two copies to the organization or individual paying income as the basis for calculating the deduction for the dependent.

The organization or individual paying income keeps one copy of the registration and submits one copy of the registration to the tax authority directly managing it at the same time as submitting the personal income tax return for that tax period.

For individuals who directly declare taxes with the tax authority, the individual must submit one copy of the registration of the dependent according to the prescribed form to the tax authority directly managing the organization paying income at the same time as submitting the personal income tax return for that tax period.

How to register and submit supporting documents to prove dependents for tax deduction when changing workplaces in Vietnam? - Source: Internet

How many times can an individual claim a tax deduction for a dependent in Vietnam?

Pursuant to Clause 2 Article 19 of the Law on Personal Income Tax in 2007 stipulating reduction based on family circumstances as follows:

Reduction based on family circumstances

1. Reduction based on family circumstances means a sum of money deductible from pre-tax income from business, salary or wage of a resident taxpayer. Reduction based on family circumstances consists of the following two parts:

a/ Reduction for the taxpayer, which is VND 4 million/month (VND 48 million/year);

b/ Reduction for each dependant of the taxpayer, which is VND 1.6 million/month.

2. The level of reduction based on family circumstances applicable to dependants is determined on the principle that each dependant may be counted only once for tax reduction for a taxpayer.

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 reduction based on family circumstances.

Therefore, each dependant may be counted only once for tax reduction for a taxpayer.

What documents are required for registering for a tax deduction for a dependent directly at the tax authority in Vietnam?

Pursuant to paragraph a, subparagraph 3, section 3 of Circular 13762/CTHN-HKDCN of 2023, the following documents are required for registering for a tax deduction for a dependent directly at the tax authority:

- Form 07/ĐK-NPT-TNCN for registering a dependent, issued together with Appendix 2 of Circular 80/2021/TT-BTC at [link].

- Documents proving the dependent's status, as instructed in Article 1 of Circular 79/2022/TT-BTC.

- In cases where the dependent is directly raised by the taxpayer, a confirmation from the People's Committee of the commune/ward where the dependent resides, in accordance with Form 07/XN-NPT-TNCN, issued together with Appendix 2 of Circular 80/2021/TT-BTC.

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