Family circumstances deduction when calculating personal income tax is an important regulation, from which employees will be able to reduce an amount of PIT. So, how is the procedure for registration of dependents for family circumstance-based reduction regulated by law?

To help you understand more about the procedure for registration of dependents for the family deduction, Hong Bang Law would like to advise as follows:

Legal grounds

• Law on Tax Administration 2019
• Decree No. 126/2020/ND-CP dated October 19, 2020 of the Government detailing a number of articles of the Law on Tax administration.
• Circular No. 105/2020/TT-BTC dated December 3, 2020 of the Ministry of Finance guiding tax registration.
• Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding the implementation of a number of articles of the Law on Personal Income Tax, the Law amending and supplementing a number of articles of the Law on Income Tax individuals and the Government’s Decree No. 65/2013/ND-CP dated June 27, 2013 detailing a number of articles of the Law on Personal Income Tax and the Law amending and supplementing a number of articles of the Law on Income Tax. personal input

Dependents Included 

Dependents are the individual income taxpayers who are responsible for the upkeep. Pursuant to Point d, Clause 1, Article 9 of Circular 111/2013/TT-BTC, dependents include:

• Children: Natural children, legally adopted children, illegitimate children, stepchildren of the wife, stepchildren of husband, specifically: (1) children under 18 years old (full month); (2) Children aged 18 years or older are disabled and unable to work; (3) Children who are studying in Vietnam or abroad at university, college, professional secondary school, vocational training, including children aged 18 years or older who are studying at high school (including during waiting for university exam results from June to September in grade 12) have no income or have an average monthly income of the year from all sources of income not exceeding 1,000,000 VND
• Taxpayer’s spouse; Birth father, natural mother; father-in-law, mother-in-law (or father-in-law, mother-in-law); stepfather, stepmother; the taxpayer’s legal adoptive father and mother; other helpless individuals that taxpayers are directly nurturing such as siblings, siblings of taxpayers, grandfathers, grandmothers; grandfather grandmother; biological aunts, biological aunts, uncles, biological uncles, biological uncles of taxpayers, biological grandchildren of taxpayers include: children of biological brothers, biological sisters, younger siblings, other persons who must be directly cared for according to the provisions of law and satisfy the following conditions:
  • Being disabled, unable to work.
  • No income or an average monthly income of the year from all income sources does not exceed 1,000,000 VND.
  • For people over of working age, they must have no income or have an average monthly income of the year from all income sources not exceeding 1,000,000 VND.

Note: Persons with disabilities and unable to work mentioned above are those subject to the provisions of the law on disabled people, people suffering from diseases unable to work (such as AIDS, cancer, kidney failure). satisfied,…).

Principles of the family deduction for dependents

• Taxpayers are entitled to a deduction of family circumstances for their dependents if the taxpayer has registered for tax and is granted a tax identification number.
• When the taxpayer registers for family circumstance-based deduction for dependents, the tax authority will issue a tax identification number for the dependent and be temporarily calculated for family circumstance-based deduction in the year from the date of registration. For dependents who have been registered for a family circumstance-based reduction before the effective date of Circular 111/2013/TT-BTC, they will continue to receive family circumstance-based deduction until they are granted a tax identification number.
• In case the taxpayer has not yet calculated the deduction for family circumstances for the dependents in the tax year, the deduction for the dependents shall be calculated from the month when the maintenance obligation arises when the taxpayer makes the tax finalization and registers the tax return. Sign a deduction for family circumstances for dependents. Particularly for dependents who are other helpless individuals that the taxpayer is directly raising, the deadline for registration for family circumstance-based reduction is December 31 of the tax year, beyond the time limit specified in Clause 1 of this Article. above, the family circumstances deduction is not calculated for that tax year.
• Each dependent can only be deducted once for one taxpayer in the tax year. In case many taxpayers have the same dependents to take care of, the taxpayers themselves agree to register for the family circumstance-based reduction in one taxpayer.

Procedures for registration of dependents for family deduction

In case an individual authorizes an income-paying agency to register tax for his/her dependents

• Profile components include:
  • Authorization letter;
  • Dependent papers: A copy of the citizen’s identity card or a copy of the people’s identity card that is still valid for dependents with Vietnamese nationality from full 14 years of age or older; copy of Birth Certificate or copy of valid Passport for dependents of Vietnamese nationality under 14 years old; Copy of Passport for dependents who are foreign nationals or Vietnamese nationals Male living abroad
• Order and competent authority to settle:

• • Individuals submit tax registration documents at the income-paying agency
  • The income-paying agency summarizes and sends a tax registration declaration (form No. 20-DK-TH-TCT according to Circular 105/2020/TT-BTC) to the tax agency directly managing the income-paying agency. 

In case an individual does not authorize an income-paying agency to register tax for his/her dependents

• Profile composition:

• • Tax registration declaration form No. 20-DK-TCT issued together with Circular 105/2020/TT-BTC;
  • A copy of the citizen identification card or a copy of the valid people’s identity card for dependents of Vietnamese nationality who are full 14 years of age or older; copy of Birth Certificate or Passport valid for dependents with Vietnamese nationality under 14 years old; a copy of the valid Passport for dependents who are foreign nationals or Vietnamese nationals living abroad.
• Competent authority to deal with:

• • At the Tax Department where individuals work, for residents who earn incomes from salaries and wages paid by international organizations, Embassies and Consulates in Vietnam, these organizations have not yet implemented them. tax deduction.
  • At the Tax Department where jobs in Vietnam arise for individuals who earn incomes from salaries and wages paid by organizations and individuals from abroad.
  • At the Sub-Department of Taxation, the Sub-department of Taxation in the area where the individual resides (where registered for permanent residence or temporary residence) for other cases

The above is the advice of Hong Bang Law Firm on the procedure for registration of dependents to reduce family circumstances. If you need advice, more detailed answers as well as how to access this service, please contact directly the Deputy Director in charge of business: Lawyer Nhat Nam via hotline: 0912.35.65.75, or call our free legal consultation hotline: 1900.6575 and send mail to lienheluathongbang@gmail.com