Tax Exemption for Financial Support for Medical Care of Severe Illnesses

According to Point g, Clause 2, Article 2 of Circular 111/2013/TT-BTC, it is stipulated: The support provided by the employer for critical illness medical examination and treatment for the employee and their relatives (including biological children, legally adopted children, illegitimate children, stepchildren of either spouse; spouse; biological parents; parents-in-law or parents of the spouse; stepfather, stepmother; legal adoptive parents) will not be included in taxable income. To be specific:

- The support amount not included in taxable income is the actual amount paid according to hospital fee payment vouchers but not exceeding the hospital fees of the employee and their relatives after deducting the amount paid by the insurance organization.- The employer providing the support is responsible for retaining:- A copy of the hospital fee payment voucher certified by the employer (in case the employee and their relatives pay the remaining amount after the insurance organization pays directly to the medical facility) or a copy of the hospital fee payment voucher;- A copy of the health insurance payment voucher certified by the employer (in case the employee and their relatives pay all the hospital fees, and the insurance organization reimburses the employee and their relatives);- Documents for the support payment for the employee and their relatives suffering from critical illness.

Additionally, according to Circular 111, employees suffering from critical illness are also considered for personal income tax reduction for the tax payable in the tax year. The tax reduction is determined as follows:

- If the tax payable in the tax year is greater than the damage level, the tax reduction equals the damage level.- If the tax payable in the tax year is less than the damage level, the tax reduction equals the tax payable.

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