Is there a personal income tax reduction for persons suffering from a serious illness in Vietnam?

13:44, 11/07/2024

A person with monthly taxable income subject to personal income tax (PIT) discovers that they have a critical illness. In this case, is that person eligible for a tax exemption or reduction in PIT? If so, what are the procedures?

Based on Article 5 of the Law on Personal Income Tax 2007, which stipulates that taxpayers facing difficulties due to natural disasters, fires, accidents, or severe diseases affecting their ability to pay tax are considered for tax reduction corresponding to the level of damage but not exceeding the amount of tax payable. Hence, in the case of discovering that one has contracted a severe disease, personal income tax (PIT) reduction will be considered.

Additionally, based on Point g Clause 2 Article 2 of Circular 111/2013/TT-BTC, it is stipulated that the following amounts are not included in taxable income:

g.1) The support provided by the employer for medical treatment of severe diseases for the employee themselves and their family members. …

Specifically, the list of severe diseases serving as the basis for considering personal income tax reduction for taxpayers with severe diseases regulated in Article 5 of Decree 65/2013/ND-CP includes:

1. Cancer	16. Progressive muscular atrophy	31. Organ transplant (heart transplant, liver transplant, kidney transplant)
2. First heart attack	17. Severe rheumatoid arthritis	32. Progressive pulmonary tuberculosis
3. Coronary artery surgery	18. Gangrene due to hemolytic streptococcal infection	33. Severe burns
4. Heart valve replacement surgery	19. Aplastic anemia	34. Cardiomyopathy
5. Aortic surgery	20. Paralysis of two limbs	35. Alzheimer’s disease or dementia
6. Stroke	21. Blindness in both eyes	36. Pulmonary hypertension
7. Coma	22. Loss of two limbs	37. Motor nerve conduction disorder
8. Multiple sclerosis	23. Hearing loss	38. Severe brain injury
9. Amyotrophic lateral sclerosis	24. Loss of speech	39. Elephantiasis
10. Parkinson’s disease	25. Total and permanent disability	40. Occupational HIV infection
11. Bacterial meningitis	26. Kidney failure	41. Bone marrow transplant
12. Severe encephalitis	27. Polycystic kidney disease	42. Polio
13. Benign brain tumor	28. Recurrent chronic pancreatitis
14. Muscular dystrophy	29. Liver failure
15. Progressive bulbar palsy	30. Systemic lupus erythematosus

The PIT reduction dossier for individuals with severe diseases includes:

- A written request for tax reduction according to form No. 08/MGT-TNCN issued together with Circular 92/2015/TT-BTC.

- Copies of medical records or examination books.

- Documents proving the medical treatment expenses issued by a medical authority; or medical bills accompanied by a doctor’s prescription.

- Personal income tax finalization declaration (if the individual is subject to tax finalization).

- Le Duyen -

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