Raise the threshold for determining dependent income to 3 million VND

The content is stated in Circular 87 of the Ministry of Finance on a number of regulations implementing the Law on Personal Income Tax.

Accordingly, dependents are eligible for family deductions if their average income in the year from all sources is not more than 3 million VND per month. This level is 3 times higher, up from 1 million VND compared to the previous regulation.

Taxpayers determine their dependents’ conditions and are responsible for declaring honestly and accurately the dependent’s income.

The Circular also provides guidance on documents proving dependents to receive family deductions, including children, spouses, parents and other helpless individuals directly cared for by the taxpayer. For dependents who are unable to work, in addition to documents proving the relationship, documents proving their inability to work must also be supplemented according to regulations.

Dependents are individuals that taxpayers must support, such as children or parents who have no income, are unable to work, or have low income. When calculating taxes, the payer will receive a fixed deduction for each individual dependent.

In fact, the income level used as a basis for determining dependents has remained 1 million VND per month since 2013. After more than a decade, people’s price level, spending and income have changed significantly, making this income threshold no longer consistent with reality.

Previously, the Ministry of Finance assessed that the increased income threshold of 3 million VND with dependents is currently higher than the increase in spending – average income in the past 12 years and forecasts for the coming years. This level also exceeds the income threshold to determine poor households in urban areas according to new regulations.

From January 1, 2026, the family deduction for taxpayers is 15.5 million VND and dependents 6.2 million VND. From July 1, taxpayers will receive a maximum deduction of VND 47 million per year for medical and education expenses before calculating personal income tax. The remaining amount is personal taxable income.

Statistics show that people’s living standards have improved significantly. Specifically, average spending per capita in 2024 will reach about 2.98 million VND a month, an increase of about 1.6 times compared to 2014.

Average income per capita reached 5.15 million VND per month, an increase of about 2 times compared to 2.64 million in 2014. The threshold for determining poor and near-poor households is 2.2 million VND per person per month for rural areas and 2.8 million for people in urban areas.

In addition, the Circular also provides guidance on personal income tax on derivative securities transfers with a tax rate of 0.1% on each transfer. With futures contracts, the time to determine taxable income is when the buy or sell order is matched on the trading system of the Stock Exchange or when the contract expires.