Reduce file duplication, take advantage of electronic data
According to current regulations, taxpayers with dependents who are entitled to family deductions must carry out separate registration procedures, through the income paying agency or directly at the tax agency. At the settlement period, individuals still have to submit documents with the dependent's previously registered information, leading to many repetitive operations for both taxpayers and management agencies.
To overcome this situation, the Ministry of Finance is soliciting opinions on the draft Decree amending and supplementing Decree No. 126/2020/ND-CP. In the draft, the Ministry proposed to abolish the administrative procedure for "Registering dependents for family deductions for individuals with income from salaries and wages", and at the same time combine it with the administrative procedure for "Registering taxes for dependents to reduce family deductions for individual income taxpayers", stipulated in Circular No. 86/2024/TT-BTC.
Accordingly, Forms 07/DK-NPT-TNCN (Dependant Registration) and 07/THDK-NPT-TNCN (Annex of the summary table for registering dependents for people with family deductions) will be abolished. Instead, taxpayers use form No. 07/XN-NPT-TNCN - Appendix of the declaration table on the person who must be directly supported, along with documents proving dependent according to the Law on Personal Income Tax, carried out at the same time as the first tax registration procedure.
This is considered an important reform step, helping to reduce paperwork, reduce file size and improve tax management efficiency.
Personal identification data replaces manual documents
The draft clearly states that the combination of these two administrative procedures is to avoid duplication of file components, while taking advantage of the existing electronic database. Information on dependents will be queried from the National Population Database and the connection systems of the Tax sector, based on the personal identification code used as the tax code.
Thanks to that, taxpayers do not need to re-declare existing information. Tax authorities can automatically compare the relationship between taxpayers and dependents, significantly reducing the volume of manual records and improving the accuracy in determining subjects for family deductions.
In common cases such as registering dependents as children, parents, spouses, the tax authority's application can automatically queries population data, without requiring taxpayers to submit additional supporting documents. When registering for dependents, taxpayers only need to declare a single set of identification information (name, date of birth, personal identification code), the system will automatically update the family deduction file.
For tax authorities, synchronizing data between national databases and tax management systems will help provide tax codes to dependents quickly and transparently, while reducing the pressure on file processing and increasing the efficiency of tax administration.
