Individuals with income from salaries or wages are eligible for family deductions for dependents. However, you need to pay attention to registering dependents properly.

This article was consulted by Lawyer Nguyen Quang Trung

Legal grounds:

• Circular No. 111/2013/TT-BTC;
• Official Dispatch No. 5054/TCT-DNNCN dated November 10, 2023 of the General Department of Taxation.

We receive the following questions:

Hello, previously I registered my dependents as my mother and 2 children at my old company. At the end of 2023, I moved to a new company. I think there is no need to declare dependent information again. But recently, HR informed me that I have to pay personal income tax for the fourth quarter of 2023 because I have no dependents. I want to ask if I can re-register my dependents to reduce personal income tax for the fourth quarter of 2023?

In principle, before paying income to employees, businesses will deduct personal income tax. Therefore, employees moving to a new company must immediately notify their dependents so that the new company can make family deductions.

In the case of the specific question above, because the employee subjectively did not declare dependents at the new company, the new company does not have information to reduce individual’s taxable income.

Pursuant to Points c and i, Clause 1, Article 9 of Circular No. 111/2013/TT-BTC as follows:

Article 9. Deductions

Deductions according to the instructions in this Article are amounts deducted from an individual’s taxable income before determining taxable income from salaries, wages, and business. As follows:

1. Family deductions

c) Principles for calculating family deductions

c.2) Family allowance deduction for dependents

c.2.1) Taxpayers are entitled to family deductions for dependents if the taxpayer has registered for tax and been issued a tax code.

c.2.2) When a taxpayer registers for family deductions for dependents, the tax authority will issue a tax code for the dependent and a temporary family deduction will be calculated for the year from registration. For dependents who have registered for family deductions before the effective date of this Circular, they will continue to receive family deductions until they are granted a tax code.

c.2.3) In case the taxpayer has not calculated family deductions for dependents in the tax year, the deductions for dependents will be calculated from the month the care obligation arises when the taxpayer performs tax finalization and registered for family deductions for dependents. Particularly for other dependents, according to the instructions in item d.4, point d, clause 1, this Article, the deadline to register for family deductions is December 31 of the tax year, past the above deadline, the family deductions cannot be calculated for that tax year.

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i) Taxpayers only have to register and submit documents proving each dependent once during the period of calculating family deductions. In case the taxpayer changes his workplace or place of business, he must register and submit documents proving dependents as in the case of registering dependents for the first time according to the instructions in section h.2.1.1.1, point h, clause 1, this Article.

According to the above regulations:

• When an employee changes workplace, he/she must re-register dependents similar to the first registration;
• While the employee has not re-registered his/her dependents, the company will not be able to calculate family deductions;
• Even though family deductions for dependents have not been made during the year, at the time of doing tax finalization, the employee can still be counted as family deductions for dependents from the month the care obligation arises and the dependents be registered.