Why is it necessary to adjust family circumstance deductions before the 2026 tax reform?
In the context of the tax legal system in Vietnam undergoing strong transformations, mastering the regulations on personal income tax (PIT) has become more urgent than ever. To prepare for the upcoming major changes, readers should refer to the detailed article on Tax Consulting: The Key to Effectively Preparing for the 2026 Personal Income Tax Reform in Vietnam for an overview and a smart personal financial management strategy.
Correctly and fully implementing the procedures for adjusting family circumstance deductions not only helps you optimize the tax amount payable but also avoids unnecessary legal troubles when tax authorities conduct finalization audits. Before the new regulations on the 2026 PIT reform are officially applied, reviewing dependent information is an important stepping stone to protect your own financial interests.
What is a family circumstance deduction and why is it necessary to adjust it?
A family circumstance deduction is an amount deducted from taxable income before calculating tax on income from salaries and wages of resident individuals. Currently, the family circumstance deduction level for the taxpayer themselves is 11 million VND/month and for each dependent is 4.4 million VND/month.
Adjusting the family circumstance deduction is mandatory in the following cases:
- Dependent information has changed (change of citizen identity card/ID card number, change of full name).
- The dependent no longer meets the conditions to be a dependent (e.g., they have started working with income exceeding the prescribed level, or they have passed away).
- An individual wants to change the person entitled to the deduction in cases where multiple people are supporting the same dependent.
Detailed steps to adjust family circumstance deductions
To make adjustments, individuals need to do so through their income-paying unit or declare directly with the tax authority. Below is the standard process:
Step 1: Review and prepare documents
You need to check the entire current list of dependents. Ensure that documents such as birth certificates and citizen identity cards of dependents are still valid and match the information in the tax system. If there are changes, prepare documents proving those changes.
Step 2: Prepare the registration or information change declaration
Individuals submit the Dependent Registration Declaration according to form 07/ĐK-NPT-TNCN issued with Circular 105/2020/TT-BTC. You need to clearly state the changes in the “Registration for change of dependent information” section.
Step 3: Submit documents to the income-paying unit
Most employees will submit these documents to their company’s HR or accounting department. The company is responsible for aggregating and sending the change information to the directly managing tax authority via the General Department of Taxation’s electronic information portal.
“Golden” tips to avoid mistakes before 2026
The period from now until 2026 is the “golden” time for you to optimize deductions. Here are important notes:
- Notification deadline: According to regulations, when there is a change in dependent information, the individual must notify the income-paying organization within 10 working days from the date the change occurs.
- Integrity of documents: Tax authorities currently apply digital technology to cross-check national residential data. Any act of falsely declaring dependents will be detected quickly and lead to heavy administrative penalties, or even tax arrears plus late payment interest.
- Preparing for the 2026 reform: The 2026 PIT reform is expected to have many changes regarding tax brackets and deduction levels. Therefore, maintaining transparent and accurate records from now on will help you easily transition and update according to new regulations without interruption.
Frequently Asked Questions (FAQ)
1. What happens if I forget to adjust the family circumstance deduction when a dependent is no longer eligible?
If you do not notify in time, you will be considered to have declared incorrectly. When the tax authority inspects, you will have to pay back the tax amount that was incorrectly deducted plus a late payment penalty of 0.03%/day on the outstanding tax amount.
2. Can two people register for a deduction for the same dependent?
No. Each dependent can only be calculated for deduction once for one taxpayer in a tax year. If multiple people are supporting the same person, they must agree on who will register for the deduction.
3. How can I check if my dependent information has been updated?
You can access the website thuedientu.gdt.gov.vn or the eTax Mobile application to check your dependent registration status using your personal tax identification number.
Conclusion
Adjusting family circumstance deductions is not only a tax obligation but also a right to protect personal finances. In a context where tax policies are being refined for transparency, proactively complying with regulations is the best way for you to work and invest with peace of mind. Take the time to review your information today to proactively and confidently welcome the changes of 2026.