FAMILY DEDUCTION, IS GRANDCHILD ADOPTING UNCLE ENTITLED TO ?

In some cases, people who are taking care of relatives such as uncles may be allowed to claim family deduction for dependents when calculating personal income tax, similar to people taking care of relatives who are children, or spouses, parents… Then, to apply family deduction to individuals who are adopting uncle, what conditions need to be met?

What is family deduction?

Family deduction is the amount deducted from taxable income before calculating tax on income from business, salaries, and wages of taxpayers who are resident individuals. Family deductions include the following two parts:

– Reduction for the taxpayer;

– Reduction for each dependant of the taxpayer.

Determination of family deduction for dependents is carried out on the principle that each dependent can only be counted as a deduction once for one taxpayer.

(Regulated in Article 19 of the Personal Income Tax Law 2007).

Who are the dependents to determine family deduction?

CPursuant to the provisions of Clause 3, Article 12 of Decree 65/2013/ND-CP, the subjects and grounds for determining dependents that taxpayers are obliged to care for are prescribed as follows:

Subjects to be the basis for determining dependents for family deduction:

– Children (including biological children, legally adopted children, wife’s stepchildren, husband’s stepchildren) under 18 years old;

– Children (including biological children, legally adopted children, stepchildren of the wife, stepchildren of the husband) aged 18 years or older are disabled and unable to work;

– Children (including biological children, legally adopted children, stepchildren of the wife, stepchildren of the husband) who are studying at university, college, vocational high school, vocational training, including children 18 years of age or older who are studying at the university level general education with no income or income that does not exceed the income level used as a basis for determining dependents;

– People outside of working age, people of working age as prescribed by law but disabled and unable to work without income or with income but not exceeding the income level as a basis for determination dependents, including:

+ The taxpayer’s spouse;

+ Biological father, biological mother, stepfather, stepmother, legal adoptive parents, father-in-law, mother-in-law (or father-in-law, mother-in-law) of the taxpayer;

+ Other individuals who have no one to rely on and must be directly cared for by taxpayers.

Income level as a basis for determining dependents:

The income level used as a basis for determining dependents eligible for deduction is the average monthly income of the year from all sources of income not exceeding VND1,000,000.

Based on the above regulations, an individual can be entitiled to family deduction in the case of adopting the uncle who is supportless and has an average monthly income of the year from all income sources not exceeding VND1,000,000.

How is the level of deduction for dependents’ family circumstances?

Regulations in Resolution 954/2020/UBTVQH14, the deduction for each dependent is 4.4 million VND/month.

>> DOCUMENTS FOR PROOF OF DEPENDANTS https://linconlaw.vn/documents-for-proof-of-dependants/

>> PROCEDURES FOR REGISTRATION OF DEPENDENT FOR PERSONAL DEDUCTION https://linconlaw.vn/procedures-for-registration-of-dependent-for-personal-deduction/