Are individual business owners entitled to family deductions?

Illustration photo.

Previously, Ms. Phan Thi Thanh Dao ( Ho Chi Minh City) paid personal income tax and registered for family deductions at the company. From mid-2019 until now, she quit her job and became a freelancer to conveniently take care of her parents (born in 1931 and 1936).

Ms. Dao is not married and lives with her parents. Her current income is 13-15 million VND/month, and is not considered for family deductions.

She proposed that the authorities consider adding family deductions for people with income from self-employment.

Regarding this issue, Ho Chi Minh City Tax Department 17 has the following opinion:

Pursuant to Circular No. 40/2021/TT-BTC dated June 1, 2021 of the Minister of Finance guiding value added tax (VAT), personal income tax (PIT) and tax management for business households and business individuals:

"Article 4. Principles of tax calculation

… 2. Business households and business individuals with revenue from production and business activities in the calendar year of 100 million VND or less are not required to pay VAT and personal income tax according to the provisions of law on VAT and personal income tax. Business households and business individuals are responsible for declaring taxes accurately, honestly, and completely and submitting tax records on time, and are responsible before the law for the accuracy, honesty, and completeness of tax records according to regulations.

… Article 10. Tax basis

The basis for calculating tax for business households and business individuals is taxable revenue and tax rate calculated on revenue...".

Based on the above regulations, business households and business individuals with revenue from production and business activities in a calendar year of 100 million VND or less are not required to pay VAT and personal income tax according to the law on VAT and personal income tax.

The basis for calculating tax for business households and individual businesses is taxable revenue and tax rate calculated on revenue. According to current regulations, there is no family deduction when calculating tax for business households and individual businesses.

Ho Chi Minh City Tax Department 17 responded to Ms. Phan Thi Thanh Dao to know to implement in accordance with the provisions of the legal documents cited in this document.

Source: https://vtv.vn/ca-nhan-kinh-doanh-co-duoc-giam-tru-gia-canh-100251013143636094.htm