Improving the legal framework on family circumstance deductions under personal income tax law in Vietnam

Family circumstance deductions constitute an important component of personal income tax law, helping ensure tax fairness and reflect taxpayers’ actual ability to pay. This study analyzes Vietnamese legal provisions on family circumstance deductions, focusing on their scope of application, eligible persons, deduction levels, conditions for determining dependents, and administrative mechanisms. Based on an examination of current law and selected international experience, the study identifies achievements as well as limitations, including adjustment mechanisms that do not adequately keep pace with socioeconomic changes, insufficiently flexible rules on dependents, and difficulties in tax administration. The study proposes solutions to further improve the legal framework toward greater fairness, transparency, responsiveness to taxpayers’ actual circumstances, and more effective tax administration.