What are personal deductions when paying personal income tax in Vietnam?
What are personal deductions when paying personal income tax in Vietnam? Question from Ms. An (Binh Duong)
Can both spouses register their dependants together in Vietnam?
Pursuant to Point c, Clause 1, Article 9 of Circular 111/2013/TT-BTC amended by Clause 6, Article 25 of Circular 92/2015/TT-BTC, regulations on deductions:
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
According to Article 19 of the Law on Personal income tax, Clause 4 Article 1 of the Law on the amendments to the Law on Personal income tax, and Article 12 of the Decree No. 65/2013/ND-CP:
c) Calculating deduction
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c.2) Deduction for dependants
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c.2.4) The deduction for a dependant shall apply to only one taxpayer in the tax year. Where multiple taxpayers have the same dependant to provide for, they shall reach an agreement on the person that makes the deduction for such dependant.
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According to this Article, each dependent can only be counted as a deduction once for a taxpayer in the tax year in Vietnam.
Thus, both husband and wife cannot register dependents together. In case the couple shares a dependent to care for, they must agree to register for family deductions as one taxpayer in Vietnam.
What are personal deductions when paying personal income tax in Vietnam? (Image from the Internet)
Who are identified as dependants in Vietnam?
Pursuant to Point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC regulating dependents, including:
(1) Children : biological children, legally adopted children, illegitimate children, stepchildren, specifically including:
- Children under 18 years old (calculated by month).
- Children 18 years of age or older are disabled and unable to work.
- Children are studying in Vietnam or abroad at the university, college, professional high school, vocational level, including children 18 years of age or older who are studying in high school without income or with income Average monthly income from all sources of income does not exceed 1,000,000 VND.
(2) The taxpayer's spouse meets the following conditions:
- For people of working age, the following conditions must be met simultaneously:
+ Disabled, unable to work.
+ Have no income or have an average monthly income of the year from all sources of income not exceeding 1,000,000 VND.
- For people outside of working age, they must have no income or have an average monthly income of the year from all sources of income not exceeding 1,000,000 VND.
(3) Biological father, biological mother; father-in-law, mother-in-law; stepfather, stepmother; The taxpayer's legal adoptive father and adoptive mother meet the following conditions:
- For people of working age, the following conditions must be met simultaneously:
+ Disabled, unable to work.
+ Have no income or have an average monthly income of the year from all sources of income not exceeding 1,000,000 VND.
- For people outside of working age, they must have no income or have an average monthly income of the year from all sources of income not exceeding 1,000,000 VND.
(4) Other helpless individuals that taxpayers are directly caring for and who meet the prescribed conditions, including:
- Brother, sister, or younger brother of the taxpayer.
- Grandfather grandmother; grandfather grandmother; paternal aunt, paternal aunt, paternal uncle, paternal uncle, paternal uncle of the taxpayer.
- A taxpayer's biological grandchildren include: children of biological brothers, biological sisters, younger siblings.
- Other people who must directly take care of them according to the provisions of law.
(5) People with disabilities and inability to work are people regulated by the law on people with disabilities and people with diseases that make them unable to work (such as AIDS, cancer, chronic kidney failure, etc.)
What are personal deductions when paying personal income tax in Vietnam?
Pursuant to Article 1 of Resolution 954/2020/UBTVQH14 regulating personal deductions:
The personal deductions
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 personal deduction level in Vietnam is determined as follows:
- The deduction level for taxpayers is 11 million VND/month (132 million VND/year);
- The deduction for each dependent is 4.4 million VND/month.
Best regards!
